How to support intercompany invoices?

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Your business may be part of a tax group for income tax purposes. Invoices issued to other companies within the tax group – intercompany invoices – are not taxed.

How to support this with JustOn Billing & Invoice Management?

In short, you create a new tax rule to cover this use case and then flag the relevant accounts accordingly so that invoices to these accounts apply the tax rule.

1. Create the field Account Tax Class on the Account.

   API Name	Type	Description
   ON_AccountTaxClass	Text or Formula (Text)	Specifies the criterion to match the tax rule, like Intercompany. If configured as a formula, it can determine the value based on other data.

   JustOn will copy the value of this field to the invoice field Account Tax Class on invoice generation using the ON field mechanism.

2. Create a tax rule for intercompany invoices.

   Field	Value
   Name	Intercompany
   Account Tax Class	Intercompany
   Tax Rate	0

   JustOn will match this tax rule on invoice generation and, consequently, apply 0% tax to the involved invoice line items.

Info

Be aware that, in addition, you may have to

• adjust G/L account assignment rules and
• add a notification on this tax use case to the invoice PDF, as explained in Editing Standard Text Blocks.

With this respect, contact your tax consultant.