Dynamics GP Shipping Methods and their Role in Taxation

We will base our instructions on the version 2010/11.0, which is the recent one as we are writing these lines in March 2011. However if you are on older version our instructions should still work, just use old fashion navigation style via cascading menus, or toolbars. We'll try to give some coverage to international tax setup, but it should be limited, for additional info, please read Foundation manuals. Let's begin with the theory. As you might be aware taxing is often depends on the place where the point of ownership exchange happens. For example, if you are located in Illinois, and you are purchasing something from the vendor in California (who has nationwide presence) the Sales Tax jurisdiction depends on the shipping method. If you are driving or flying out to CA, then you pay California Sales Tax. Otherwise if the goods are delivered to your office or house in Chicago you pay Illinois, city of Chicago and Cook County sales tax. Let's review the mechanics of making it happen:

1.Company Setup Options. In Administration Setup section click on Company Setup and then from the window, which should be opened click on Options. On the top of the list of checkboxes you will see Use Shipping Method when Selecting Default Tax Schedule. If you mark this option tax will be based on the shipping method (where you can have either pickup or delivery)

2.Default Shipping Methods. When you are doing basic or default installations shipping methods are loaded: Courier (delivery), Drop Ship (delivery), Express mail, etc. If you are shipping by specific freight forwarding partner, consider adding that as new shipping method. The key point in tax schedule automatic selection is Shipping Type: Pickup or Delivery

3.Some International Tax options. Here Great Plains covers Quebec Sales Tax (QST), Australian GST, European VAT (Value Added Tax), Canadian Provincial Sales Tax (PST), GST or Goods and Services Tax. There are also tax bases considerations: Flat Amount Per Unit (when you purchase gallon of the gasoline), Tax Included with Item Price (VAT), Percent of Sale or Purchase (typical US State sales tax or use tax, in the case of purchase), percent of another tax detail (excise tax for tobacco or alcohol/liquor)

4.Some highlights. In UK Value Added Tax (VAT) is considered as a percentage of Purchase or Sales Tax. In Canada Goods and Service Tax (GST) is calculated as a percentage of Purchase/sale tax. Plus in Canada each province decides if its Province Sales tax (PST) should include GST into its taxable base: Quebec includes, British Columbia doesn't. In the USA taxable tax is not used in general

5.Tax Incentives. It is possible to use such mechanisms as excluding items that are sold at the cheaper price that is set as minimum to trigger taxing. It is also possible to specify maximum taxable amount, then whatever is the price over the taxable limit it is not taxable and it might be nice incentive for the retailer and the end customer (Invoice total might be selected in that scenario)

6.Taxable Tax Option. Please mark this box, if you are required to include one of the taxes for the taxation base for the next tax (for example if in your Canadian province GST tax is required to be included into the tax base for the Provincial Sales tax)

7.New Zealand and Canada. Here you might be required by law to print taxes on Invoices and other sales documents mark print on documents and tax first letter will be printed as the prefix for detail tax lines

8.Taxes when GP is implemented on the international Corporate ERP market. There are several localizations available, addressing Spanish speaking Latin America (excluding Brazil, where Brazilian Portuguese is spoken and European continental Spain and Portugal, where Axapta or Navision are recommended versus GP). If you are looking to implement GP in Arabic speaking country, there are localization add-ons with Arabic alphabet support enabled and some local reporting for such countries as Egypt, Saudi Arabia, Lebanon, Syria. It is possible to implement GP in South East Asia, where generic international GAAP is in use (not in China or India, where you see strong influence of local regulations). However such countries as Malaysia, Singapore, Indonesia, Philippines, Oceania are good candidates for GP implementation. If implementing this Corporate ERP application in the small countries, please apply your creativity to map local taxation to the tax options available

9.Where we don't recommend implement Great Plains as your subsidiary ERP. If you are multinational corporation, there might be a consideration to save on Corporate ERP licenses and implement your Headquarters based Accounting internationally. Please, note that Great Plains is not localized for such countries as Russia, China, Brazil, Korea, Japan. In Moscow you can translate Dexterity screens to Russian language, but Russian tax code is so complex, that we are discouraging you from customizing it in-house in order to achieve local regulation compliance. Please review Dynamics AX or NAV, SAP Business One or 1S Bukhgalteria for your Moscow office or the faclility in Russian Federation. In China the situation is more dramatic, as Microsoft Dexterity doesn't support Unicode (Hieroglyph based alphabets) out-of-the-box (you can deploy such extensions as NJ Star, but this just the patch, not a universal solution)

10.Payroll Taxes. If you are on the supported version of GP, such as 2010/11.0 or 10.0 (support for 9.0 is about to expire), you can download US or Canadian Payroll tax update pack from the Customer Source (if you have active annual contract with Microsoft Business Solutions). If you do not have active annual enhancement contract (and you are on 2010 or 10.0), you can still get the Payroll Tax Update package through your Reseller. If you are on the older versions, such as 8.0, 7.5, 7.0, 6.0, 5.5, 5.0, 4.0, including Great Plains Select on Pervasive SQL, MSDE 2000, Ctree, Btrieve, Small Business Financials 9.0, 8.0, 7.5, or 7.0 we can still help you to update your Payroll tax tables in Dynamics database, but such Obama presidency innovations as decoupling exact match for Employee and Employer portions for Social Security and Medicare is not possible in the old version (where the percentage for employee and employer was stores in single field). This is not the end of the World, Microsoft Business Solutions recommended special General Ledger entry fix to make the new rule work, call our office for details

11.Great Plains Accounting for DOS, Windows, Mac 9.5, 9.2 and earlier versions. This archaic Corporate ERP application was abandoned in earlier 2000th by Microsoft Business Solutions (successor of Great Plains Software). Please, note that this mid-market and small business ERP application is not Dexterity based and its functionality is quite different from modern days Dynamics GP

12.Please call us 1-866-304-3265, 1-269-605-4904. help@efaru.com

Andrew Karasev is Great Plains Certified Master, MVP, help@efaru.com 1-866-304-3265, 1-269-605-4904. He is also the initiator of eFaru project http://www.efaru.com and founder of Alba Spectrum information space