When entering vouchers for Recall’s Canadian business units the same PeopleSoft voucher entry pages as described in the previous section are used however additional fields on the voucher are utilized to capture Canadian tax information.
Canadian Invoices will always have GST (Goods Services Tax) applied to them. In addition, depending on the Canadian province the goods are being shipped to, a PST (Provincial Sales Tax) or QST (Quebec Sales Tax) may also be applied.
To capture GST information on Canadian vouchers, Recall will use the VAT field on the Voucher.
To capture PST or QST information when applicable on Canadian vouchers, Recall will use the Sales/Use Tax field on the Voucher.
The main keys to tax reporting on Canadian vouchers are the ship from and ship to countries, buyer and seller VAT country registration, and the VAT treatment (Domestic, Import, Outside of scope).
It is the buyer’s VAT registration country that is the VAT reporting country. Transactions processed in AP are evaluated from the position as to how it relates to the information on a VAT return. PeopleSoft will generate accounting entries for the VAT Input. The VAT amount entered is what will be used for the VAT accounting entries.
Non-recoverable VAT will be expensed to the distribution chartfields.
Examples of non-recoverable VAT include:
Meals for the company’s owner and staff
Benefits in kind to the company’s staff
In order for the voucher to be VAT applicable, the vendor has to be setup for VAT with registration information established at a country level (e.g. Canada).
Canada imposes a Goods Services Tax (GST) which applies to all Canadian provinces and territories. GST is a Value Added Tax (VAT) type. Goods and Services are taxed at a 7% rate, zero-rate or tax-exempt.
Provincial Sales Tax (PST) is a provincial level tax that applies throughout the province. The PST is regulated by the individual provincial legislation. This results in differing rates, exemptions and rules between each province.
Quebec Sales Tax (QST) is a provincial level tax that applies throughout the province of Quebec. It is a VAT type of tax, almost identical in concept and practice to Canada’s GST. It is calculated on top of GST.
QST is setup as a Sales Tax Authority and Tax Code and will be entered as Sales Tax on affected transactions.
Recall will recognize VAT in the month in which the invoice is processed. Amounts will be entered for VAT, utilizing the Exclusive calculation type.
The procedure below describes the steps involved in entering Canadian Vouchers with tax amounts.