In just over a month, the province of British Columbia will return to a provincial sales tax (PST) system, ditching the harmonized sales tax (HST) that had been brought in 3 years prior and then voted down by public referendum.
It can be challenging for businesses going through sales tax changes to manage all the moving parts during the transition. It is also critical for owners and their accounting staff to understand the impact of new tax rules and regulations on their operations.
Preparation is key. Fortunately the provincial government has launched a website to provide all the information needed for businesses to register to collect PST tax and get ready for April 1st.
For ERP admins, there are usually some modifications needed to the configuration of their system if it is used to automatically calculate sales taxes on sales and purchase transactions. Unfortunately this is not something that the government website covers, and so it is up to individuals to seek out the instructions for their particular systems.
In this blog mini-series on the PST transition, and sales taxes more generally, we will attempt to fill the gap for Dynamics NAV users by looking at how to handle rate changes, adding a new tax jurisdiction, date cut-offs, and PST self-assessment.
NAV Sales Tax Setup
Before diving into the details for the PST transition, it’s helpful to review the initial steps required to setup sales taxes in NAV. For organizations who only conduct business in North America and do not need to worry about VAT, the first step is easy. Simply open the Tax Posting Setup page (or VAT Posting Setup page depending on your language setting) and insert a new record with “Sales Tax” selected in the Tax Calculation Type field. All other fields for that line are blank, and no other lines are needed in the table.
One caveat for NAV 2013 users to be aware of – there is a bug which we have identified and reported to Microsoft when the language is set to English (Canada). If the steps above are followed with that language setting, the NAV Windows client will crash when the user clicks on the “New” button in the Tax Posting Setup. To get around this, change your language to English (United States) before launching page.
After these initial settings are in place the detailed sales tax setup is managed through tables where specific taxes are defined along with the geographic areas in which they are applicable, when they are applicable, and at what rates. Understanding how these tables work and relate to one another is critical for successfully configuring NAV sales tax functionality.
- Tax Jurisdictions
- Tax Areas
- Tax Groups
- Tax Details
In the next blog post, these are the tables we will be looking at to handle all the steps related to the PST transition. For users who have access to CustomerSource or PartnerSource, additional information can also be found in the NAV 2009 Finance North America course no. 80041. At the time of this posting, Microsoft has not yet released the same course for NAV 2013, although there do not appear to be any major modifications to the functionality between versions.