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

OK. For your purposes it looks like "The GST-inclusive price of the
taxable supply"
mentioned as mandatory on all invoices in paragraph 59 = "LegalMonetaryTotal/
LineExtensionAmount" in UBL according to my previous reasoning. The rules in
Australia look a lot simpler than UK because there is no requirement mentioned
(as far as I could see) to itemise the amounts per invoice line - just
the total and
just the total before tax and the tax amount for the whole invoice.
That's nice and
easy by comparison. (You might need to verify that GST Regulation 29-70.01 does
not add any further requirements though.) Also there is no fussing about with
multiple rates of tax and having to specify totals (and line totals) for each
separately which we have in UK (for invoices over 100 GBP). So now, how can we
best verify which are the right ABIEs for this. Obviously you're only
interested in
the document level ones for 1) Tax and 2) Taxable amount (not line
level, that is).
So it's Taxable amount we have an issue with. I would use LineExtensionAmount
and hope that it is obvious you are using it as taxable amount by looking at the
values there and in the other totals. Still, you probably need more
surety than that.
Perhaps you should just ask the Australian Government tax authorities (or local
ones, if appropriate) if they have heard of UBL and what they would advise about
this issue. The actual authority you might be looking for with UBL or
UBL-Dev list
or UBL specs might be compromised and therefore diluted a little if there is any
contradiction between artefacts or between UBL artefacts (like examples) and
any instructions in customisations like NES. The UBL BIE definition in
the schema
is normative and difficult to change (NDR seems to forbid semantic
drift - changing
semantics without creating a new BIE - though that is a little
debatable). So if it
is ambiguous it will be difficult to make it less so without breaking
some backwards
or forwards compaitibility (I can never work out which compatibility
it is). The
original examples are difficult to ignore but are not normative as such.

I would say from the normative definition for line extension amount in
legal monetary

"The total of Line Extension Amounts net of tax and settlement discounts,
but inclusive of any applicable rounding amount."

The meaning is most clear if you compare the first half of the
definition with the
second half. The second half is about "inclusive of ..." and is
preceded by a 'but'
which to implies the first half is the opposite - about what the total
excludes. Then
to support this we see that if it is about what it excludes then
'settlement discounts'
are to be excluded. This is verified by the fact that, as I said
before, settlement
discounts have to be excluded until after the tax is calculated
because they depend
on when payment is made - a fact not known when calculating what tax is payable
and as your Australian law states, the tax reclaimed has to be known to be the
same as the tax originally paid on the invoice by the issuer and
therefore has to
be possible to match exactly using the invoice. So it seems it would all make
sense if the first half of the definition was refering to what the
amount excludes. If
it was what the amount included then the matter of settlement discount would be
completely contrary to common practice and rules so I would discount
(forgive the
pun) that interpretation. Which leaves the conclusion most obvious in
my view that
the tax is also being excluded from the Line Extension Amount in the
legal total.
This is supported by the earliest examples published of how UBL 0.7
was to be used
and you could check this in the later, UBL 2 example (which I drew up
AFAIR using
the above semantic interpretation and nobody disputed it).

Now actually there is not so much cause to worry as would seem because there
is a verifying BIE in the tax total BIEs called TaxableAmount so just
getting the
total right for this would provide what the Australian rules require:
Just, though, that
you don't want your use of LineExtensionAmount to appear to contradict
it (if the
interpretation of the definition or any user guide instruction is
different to the above
one I lean towards).

Oh, if only we'd rejected use of that word 'net' in the definition
which has both a
common meaning (as Ken points out) outside of the (UK) VAT context and
apparently a contradictory overloading of usage in the UK VAT context (which
is the context most known to several of the semantics/business modelers).

I do apologies that these kinds of things happened even with UBL; we
tried to avoid
any 'Tower of Babel' outcomes but this seems to have been out of our hands to
some extent due to time and resource constraints perhaps but perhaps just the
size of the undertaking to create something for everyone (or almost everyone) in
every country, etc. Nearly got there. Hopefully nearly enough at least
for domestic
use, even if a little awkward (and perhaps, evidently, needing further
efforts) for
cross-border use.

Best regards and I've done what I could.


Stephen D Green

2009/6/22  <jaymuz@optusnet.com.au>:
> 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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