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ProffittCenter is in use throughout the world. To ensure compatibility with the differing tax regimes in use, it is necessary to look at how different sales taxes are levied, and to set up ProffittCenter accordingly. The tax regime in use is specified in the settings screen. Before rushing to choose an appropriate setting, please note that in the absence of any sales taxes, it is still necessary to specify a zero rated tax to apply to all products. The options for tax regime fall into two groups: the simpler sales taxes, and the various value added tax formats. We will explain these separately below. No tax: this setting is selected when the country of use has no sales taxes. Leave a record for one sale tax of zero for filling in the stock record for every product and another for rentals, or service charges, again with a zero rate. Sales tax: this setting is used for countries for a sales tax levied on all retail sales. The assumption is that wholesale supplies will have no tax levied. Set up one tax record with the desired rate. If there are any exempt products, then a separate zero rate is required. The tax is applied to a complete bill as a separate charge. All product prices exclude this tax. The net takings figure will include all sales but will exclude any sales taxes. VAT: This is value added tax, used in the European Union. It differs from a sales tax because the tax is applied to supplies at wholesale price, and this tax paid may then be offset against the tax charged on goods sold. The tax is thus charged on the addition cost of goods, that is the added value. There are three separate cases to consider. Registered trader: The normal situation of a registered trader, who charges the correct tax on all of their sales but the retail price of items includes these taxes. The net tax is not displayed to the customer, and is not shown on the receipt. Product prices include any tax due, but net takings exclude these taxes. Unregistered trader: traders whose annual turnover is less than some specified amount do not have to collect VAT. As they still have to pay VAT on their purchases, and cannot reclaim this element, not all tax is lost to their government. In ProffittCenter it is necessary to set the correct tax code for each product, so that the correct prices are recorded for wholesale prices, and margins, etc. Wholesale trader: these are registered traders with a main customer base are other registered traders. Prices of goods are always shown exclusive of VAT, and the tax due is shown on the screen and on any receipt. Product prices are recorded exclusive of VAT. The net takings figure excludes tax. [Previous] [Main] [Next] |
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