Handling Excise Tax (New Zealand)

Here we will show how to configure support for the New Zealand Alcohol Excise duty rates within vintrace and how to integrate Excise tax as a payable liability to external accounting packages such as Xero.

Before we begin it’s important to make sure that you have the Excise Alcohol Metric set to “Alcohol”. If it is not, then wine that you have packaged will not auto-calculate the estimated Alcohol percentage, even when you have entered the % alcohol against the packaged stock item. This is configured under Winery Setup – Work-flow – Defaults.

Excise Alc Metric

Next you will need to configure the appropriate Tax Rates. If you are new to tax rates you can click here to read more about them.

Tax Rates and Duties can be configured under Winery Setup – Tax.

Create a tax rate like the above. Ensure you name the tax rate component ‘Excise’ and hit ‘ENTER’ on your keyboard. You will then see a Warning icon that indicates this as a special tax rate. There is no need to apply a Tax Rate, as excise has rates based on the volume and alcoholic content of what you are selling.

Next we need to set up the Excise Duties. This is only visible for vintrace clients in the New Zealand locale.

Here we’ve configured the 2013-14 excise rates for wine. You can configure other rates. But only one may be active for the given time span.

Next we set out tax rate to our desired sales price list. If you are new to sales price list, please read about them here.

When creating sales orders it’s important to ensure the correct Tax Rate is set for the items you are selling. This can be defaulted on individual price lists.

As you add items to a sales order where the Excise tax rate is selected, you may see this dialog. It asks for the alcohol value of your wine. If you have measured the metrics and have a volume on your wine vintrace will calculate the alcoholic percentage and get you to confirm or modify it.

This will also set the Alcohol Content onto the stock item so that it is remembered next time. You can set this metric initially when configuring your finished good stock items as well.

Here are two different items with the same sale value, but different alcoholic metrics to show the taxable difference between the two excise rates we configured earlier.

EXCISE tax and Account Integration

Excise tax can be passed through to external accounting packages. For this example we will use Xero as the accounting package.

When configuring your Tax Rate you need to ensure you have the Excise item linked to appropriate Excise liability account in your account package. Ensure that you have both ‘Linked Tax Rate Id’ and the ‘Ext Tax Account Ref’ set on the Excise tax rate.

For Xero, the Linked Tax Rate Id should be ‘GST on Income’.

The Ext Tax Account Ref is an account that links to your excise liability account in Xero.

Excise 1

Excise 2

Once your Sales Order is approved in vintrace and synchronised to Xero, a manual journal will be created that shows the Debit from the Revenue account indicated on the line item of the Sales Order with a Credit to your Excise liability account for the calculated value of Excise payable.

Excise 3

You can access the manual journal from Accounts – Manual Journals…

Excise 4

You can then synchronise your manual journal to Xero when you perform the Accounts Sync.

You can preview the journals to be synced by clicking on Preview button in Accounts – Accounts Sync Console. You can then click on Save and Sync to synchronise the manual journal to Xero.

Excise 5

This is how your manual journal looks like in Xero after the sync.

Excise 7

 

 

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