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Subject: Re: Re: [ubl-dev] Basic Invoice Exploration


Folks,

Here is some Australian context:

http://www.ato.gov.au/content/downloads/nat5009082004.pdf

http://law.ato.gov.au/atolaw/view.htm?rank=find&criteria=AND~Tax~basic~exact:::AND~Ruling~basic~exact:::AND~GSTR~basic~exact:::AND~2000%2F17~basic~exact&target=ED&style=java&sdocid=DGS/GSTR2000D16/NAT/ATO/00001&recStart=1&PiT=99991231235958&recnum=2&tot=53&pn=ALL:::ED

> Stephen Green <stephengreenubl@gmail.com> wrote:
> 
> I've just looked at the original UBL 0p7 examples and the
> 'reference example' (if you'd regard it as that) for VAT is
> the JoineryInvoiceInstance1.xml and its printed format
> JoineryInvoiceInstance1.pdf. If you can make head or tail
> of that you might have got the right idea of how the VAT
> in UBL is meant to be represented and calculated. Of
> course it might have changed (as possibly hinted at - I'm
> not sure it's more than that - in the definition '...net of tax').
> 
> 
> 
> Here the XML says (in the 0p7, pre-UBL-1.0, format)
> 
> <cat:AllowanceCharge>
> 		<cat:ID></cat:ID>
> 		<cat:ChargeIndicator>0</cat:ChargeIndicator>
> 		<cat:MultiplierReasonCode>trade</cat:MultiplierReasonCode>
> 		<cat:MultiplierFactorQuantity 
> unitCode="1">.25</cat:MultiplierFactorQuantity>
> 	</cat:AllowanceCharge>
> 	<cat:TaxTotal>
> 		<cat:TaxTypeCode>VAT</cat:TaxTypeCode>
> 		<cat:TaxAmounts>
> 			<cat:TaxableAmount currencyID="GBP">1362.56</cat:TaxableAmount>
> 			<cat:TaxAmount currencyID="GBP">238.45</cat:TaxAmount>
> 		</cat:TaxAmounts>
> 		<cat:CategoryTotal>
> 			<cat:RateCategoryCodeID>STD</cat:RateCategoryCodeID>
> 			<cat:RatePercentNumeric>17.50</cat:RatePercentNumeric>
> 			<cat:TaxAmounts>
> 				<cat:TaxableAmount currencyID="GBP">1337.56</cat:TaxableAmount>
> 				<cat:TaxAmount currencyID="GBP">238.45</cat:TaxAmount>
> 			</cat:TaxAmounts>
> 		</cat:CategoryTotal>
> 	</cat:TaxTotal>
> 	<cat:LegalTotals>
> 		<cat:LineExtensionTotalAmount
> currencyID="GBP">1397.50</cat:LineExtensionTotalAmount>
> 		<cat:ToBePaidTotalAmount 
> currencyID="GBP">1635.95</cat:ToBePaidTotalAmount>
> 	</cat:LegalTotals>
> 
> 
> And the printed form says (albeit not in typical UK order)
> 
> 1830.00 Gross Total
> 
> 1372.50 Less 25% discount
> 
> Std 25.00 Delivery charge
> 
> 1397.50 Total Lines+Charges
> 
> Std 238.45 VAT at 17.5%
> 
> 1635.95 TOTAL DUE
> 
> The delivery charge plus the total after discount but before tax is
> 1372.50 + 25.00 = 1397.50 ("Total Lines+Charges") which in UK
> is what I think is sometimes called 'Net Total' or 'Nett Total' (a UK
> accountant could tell us which and whether there is a difference).
> If I look for how this is represented in the XML it is obviously there
> as LineExtensionTotalAmount which I see as what eventually came
> to be called LineExtensionAmount in the invoice total in UBL 2.0.
> 
> Now it appears that the definition may either show a change of
> semantics or be a little misleading but perhaps not deliberately
> ambiguous. Maybe someone somewhere along the line just
> misunderstood what in UK is meant by 'Net Total'; or maybe it
> was a change of semantics toward something more familiar to
> some in Europe. IMO. I would like to think this joinery example
> is worth regarding as a reference implementation anyway.
> 
> 
> Stephen D Green
> 
> 
> 
> 2009/6/22 Stephen Green <stephengreenubl@gmail.com>:
> > OK, I went and grabbed a utility bill (phone bill)
> >
> > It has totals at the end of the invoice as follows:
> > Prices in GBP
> >
> > Cost of calls      68.16
> > Your benefits     - 5.60
> > Rental charges   99.53
> > One-off charges  23.41
> > VAT                  32.47
> >
> > If it had an early payment discount and/or late
> > payment charge, that would follow the VAT (as
> > it is not included unless the payment is late or
> > early so it cannot affect the VAT calculation).
> >
> > Now I had assumed that the one total here which
> > seems to be called 'line extension total' is 'Cost
> > of calls'. I think it is the same total which gets
> > called 'Nett total' on many UK invoices. When I
> > look at a couple of invoices from a hotel in Germany
> > I see that the total first mentioned is one which
> > includes tax (on one invoice it says it includes tax
> > and on the other it just says 'Total' but it clearly
> > includes tax). Then it says how much the tax is.
> > Now this worries me because there is clearly the
> > possibility that UK invoices usually put first the
> > total without tax (which I think is called 'Nett total'),
> > followed by charges/allowances and then tax and
> > finally what is called the 'gross total' which is the
> > payable total before variable allowances/charges.
> > This makes it possible that there are locality-
> > dependent interpretations possible for the one total
> > which has most possibility of confusion - line
> > extension.
> >
> > Regarding 'Nett' and 'Net'; a search for examples from
> > UK on internet shows that Net Total in UK means
> > without tax
> > e.g. random example (but others are like it)
> > http://www.nominet.org.uk/registrars/fees/emailinvoice/
> > (apologies to Nominet)
> >
> > Another example shows this all the more clearly
> > 
> http://forums.contractoruk.com/accounting-legal/27004-nett-vat-breakdown-
> expenditure.html
> >
> > So it may be that in UK 'Net' (or 'Nett') means 'net of
> > all non-tax amounts - i.e. combining all line totals but
> > before any deductions/charges and taxes - and that this
> > word has gotten into the definition in UBL with such UK
> > overloading unaware of the meaning calling it 'net of tax'
> > will give to it outside of the UK. I guess in the UK, because
> > the pre-tax total is called Net Total or Nett Total (I think they
> > may have a subtle distinction Net vs Nett), the words 'net
> > of tax' might mean 'net - i.e. before tax' whereas in countries
> > without the common use of the term 'net total' the words
> > would be taken more literally to mean 'inclusive of tax'.
> >
> > Trouble is that so much of the modern VAT calculation model
> > comes from the UK (I believe they even took the VAT system
> > to ISO via BSI). Plus Mike Adcock was from UK, as were
> > Sue Probert and myself who put know-how into UBL tax model.
> > Then UK Gov provided input too, albeit via EU Gov for UBL 2.
> > I guess the (perhaps presumptuous) assumption was that even
> > EU VAT would follow very much the UK pattern (although now it
> > seems one single EU VAT is less likely than we thought a few
> > years ago).
> >
> > So I would still tend to see LineExtensionAmount (whatever
> > that means - no idea where it came from) as exclusive of VAT
> > especially since we have another total for inclusive of VAT, don't
> > we. What does NES say? BII?
> >
> > Best
> >
> > Stephen D Green
> >
> >
> >
> > 2009/6/22 Stephen Green <stephengreenubl@gmail.com>:
> >> Interesting one about the meaning of 'net'.
> >> In the same context, in the UK at least it is generally
> >> accepted practice to call the pre-tax (pre-VAT) total
> >> 'nett' and the tax-inclusive, final total 'gross'. I don't
> >> know whether some confusion has resulted from that.
> >>
> >> I only have experience with paper invoices and XML
> >> ones (not EDI) and I hadn't come across the term
> >> 'line extension' before joining the UBL TC. To us UK
> >> paper invoice people there are two main totals on
> >> the invoice - nett total and gross total with amounts
> >> for total tax (split by tax type and, for VAT, tax rate)
> >> and total discount/charges before VAT and total
> >> for discount/charges after. The total of discounts and
> >> charges taken after the VAT calculation is usually
> >> a varying one, hence it does not get included in the
> >> VAT which must be fixed and cannot be changed
> >> without cancelling and reissuing the invoice - in UK
> >> that is where VAT is sometimes claimed back by
> >> the payer and therefore has to be the same when
> >> claimed back as it is when paid by the supplier.
> >> I don't quite remember all that well but I think the
> >> nett total is one which includes any pre-VAT discounts
> >> and charges so that it is easy to check the VAT
> >> calculation (and ask for a replacement invoice if it is
> >> incorrect - or a correctional credit note or whatever
> >> if the invoice was already paid).
> >>
> >> So I too would be interested to know whether line
> >> extension amount includes VAT, having always assumed
> >> that it didn't. What did the UBL invoice examples say?
> >> I wrote some of the examples for UBL 2 but the UBL 1
> >> ones were already pretty much written before I came
> >> along. As were the terms like line extension amount.
> >>
> >> Best
> >>
> >> Steve
> >>
> >> Stephen D Green
> >>
> >>
> >>
> >> 2009/6/22 G. Ken Holman <gkholman@cranesoftwrights.com>:
> >>> Forgive me, Steve, for drawing this out but I've got my UBL Human 
> Interface
> >>> Subcommittee (HISC) hat on today.
> >>>
> >>> Since April 2006 in the HISC we've been talking about documenting 
> sample
> >>> calculation models for UBL:
> >>>
> >>>  http://markmail.org/message/7yzrxwp7ttwleyn6
> >>>
> >>> I'm finally talking with a chartered accountant in Canada regarding 
> a
> >>> calculation model for invoices in Ontario Canada (our provincial
> >>> jurisdiction).  It would be an HISC example of a model where VAT is 
> not
> >>> included in prices.
> >>>
> >>> The Danish have documented a calculation model where VAT is included 
> in
> >>> prices:
> >>>
> >>>  http://www.oioubl.info/guidelines/en/OIOUBL_GUIDE_TOTALS.pdf
> >>>
> >>> I would like to transcribe the essentials of that into an HISC 
> document of
> >>> an example model where VAT is included in prices.
> >>>
> >>> Your comments to jaymuz would be helpful to consider when writing 
> this.
> >>>
> >>> Where I'll get the time I don't know, but for three years now we 
> haven't had
> >>> any volunteers join up in HISC and write these up.
> >>>
> >>> At 2009-06-18 11:58 +0100, Stephen Green wrote:
> >>>>
> >>>> My knowledge is a bit rusty (I've been out of finance work
> >>>> for a year or so now) but I think the LineExtensionAmount
> >>>> is the amount without VAT.
> >>>
> >>> LineExtensionAmount is in the InvoiceLine ... so even if the sticker 
> price
> >>> includes VAT, the InvoiceLine LineExtensionAmount is still the price 
> without
> >>> VAT?
> >>>
> >>> LineExtensionAmount is also in the MonetaryTotal ... where it states 
> it is
> >>> the total of line extension amounts net of tax.  Being a programmer 
> and not
> >>> a businessman, I looked up the term "net of tax" and found:
> >>>
> >>>  http://www.answers.com/topic/net-of-tax
> >>>
> >>> Which implies to me that "net of tax" *includes* all tax.
> >>>
> >>> Taken together would imply a contradiction to me that 
> LineExtensionAmount in
> >>> the InvoiceLine is without tax yet LineExtensionAmount in the 
> MonetaryTotal
> >>> is with tax.
> >>>
> >>> Where is a layman like me getting confused?
> >>>
> >>>> The VAT is calculated (in my
> >>>> country at least - UK) on the total including allowances
> >>>> and charges (except those made dependant on payment
> >>>> terms like charges for late payment which do not affect
> >>>> the VAT calculation).
> >>>
> >>> Is the VAT then calculated on the individual invoice lines and the 
> total
> >>> included in the monetary total?
> >>>
> >>>> Also in UK I think it is still true that
> >>>> the VAT cannot be altered once it is declared on an
> >>>> invoice so there are some things the LineExtensionAmount
> >>>> has to include and some things it doesn't. Anyway, AFAIK,
> >>>> it is the basis for VAT calculation so it doesn't itself
> >>>> include the VAT.
> >>>
> >>> Which LineExtensionAmount?  Both?
> >>>
> >>>> All this is general accounting knowledge
> >>>
> >>> (by those who know accounting)
> >>>
> >>>> so doesn't get dicated by the language (UBL in this case)
> >>>> and does have to comply with whatever VAT rules apply
> >>>> to your invoice. I do accept that concepts like LineExtension
> >>>> have been floded into UBL and need a UBL explanation for
> >>>> what they entail - which I guess is at present just in the
> >>>> official UBL semantic definition (a bit sparce - could maybe
> >>>> be extended to include a general conceptual calculation
> >>>> model, albeit one which might have to be a default which
> >>>> gets overridden by local customs and rules).
> >>>
> >>> Hopefully with HISC publishing a couple of examples, then users in 
> different
> >>> jurisdictions will identify what has to be identified where they 
> are.
> >>>
> >>> Thanks, Steve, for all your input!
> >>>
> >>> . . . . . . . . . Ken
> >>>
> >>> --
> >>> Crane Softwrights Ltd.          http://www.CraneSoftwrights.com/u/
> >>> Training tools: Comprehensive interactive XSLT/XPath 1.0/2.0 video
> >>> Video lesson:    http://www.youtube.com/watch?v=PrNjJCh7Ppg&fmt=18
> >>> Video overview:  http://www.youtube.com/watch?v=VTiodiij6gE&fmt=18
> >>> G. Ken Holman                 mailto:gkholman@CraneSoftwrights.com
> >>> Male Cancer Awareness Nov'07  http://www.CraneSoftwrights.com/u/bc
> >>> Legal business disclaimers:  http://www.CraneSoftwrights.com/legal
> >>>
> >>>
> >>> 
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> >
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