Set up sales tax on prepayments

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Important

This content is archived and is not being updated. For the latest documentation, see Microsoft Dynamics 365 product documentation. For the latest release plans, see Dynamics 365 and Microsoft Power Platform release plans.

Applies To: Microsoft Dynamics AX 2012 R3, Microsoft Dynamics AX 2012 R2, Microsoft Dynamics AX 2012 Feature Pack, Microsoft Dynamics AX 2012

A tax authority can require that an organization must record sales taxes on prepayments from customers, even when a sale has not been made. Use the following procedure to set up sales tax on prepayments.

  1. Click Accounts receivable > Setup > Accounts receivable parameters.

  2. Click Ledger and sales tax.

  3. Click the Payment FastTab. Select the Sales tax on prepayment journal voucher check box. Sales tax is calculated and posted whenever a prepayment journal voucher is posted.

  4. In the Posting profile with prepayment journal voucher field, select a posting profile that defines the ledger account to which the sales tax transactions on prepayments are posted temporarily.

    Note

    You create a posting profile for this purpose in the Customer posting profiles form. Specify the appropriate ledger account on the Setup FastTab in the Sales tax prepayments field.

  5. When you post a prepayment journal voucher through a journal, select the Amounts include sales tax check box in the Journal form.

    Important

    If you omit this step, the sales tax is not posted correctly.

When a sales invoice is created and the prepayment journal voucher is settled, an automatic transaction on the sales tax prepayments account offsets the first temporary sales tax transaction.