For the first time in democratic South Africa, value-added tax (VAT) has been raised by one percentage point to 15%. The new VAT is effective 1 April 2018.
This article outlines how to make the necessary changes in Sage Evolution, integrate those changes to Paradigm and then process new and existing transactions using the correct tax percentages.
The steps below will cover the processing of transactions using Standard Paradigm functionality. However, there may have been Customised Features deployed in your Paradigm configuration that still reference the 14% tax value.
Implications to Customised Features in Paradigm:
- With Paradigm’s ability to add onsite customisations, it is possible that certain custom features may have been configured to hard code a calculation using 14%. Possible customisations could include, but not limited to:
- User defined fields
- Custom onscreen calculated fields
- Report layouts
- Dashboard layouts
- Custom SQL scripts
- It is your responsibility as the customer to ensure that your system processes using the correct tax value in any customised scenarios.
- Should you be unsure if there are any customisations, you can liaise with your consultant. All investigations are billable at standard consulting rates.
- If our consultants need to do the actual changes for you, the adjustment of the configurations will be billable.
Processing of Transactions Using Standard Paradigm Functionality:
1. Make Changes in Sage Evolution
The VAT rate can be changed within Sage Evolution by editing the tax types.
Go to Tax > Maintenance > Tax Types
- Each of the existing tax types set at 14%, should be edited and changed to 15%. This will have to be done on the date the new rate is effective from, 1 April 2018.
- It is advised to create a new tax type with 14%. Use this tax type to handle any backdated transactions.
Click here to view how to make the necessary changes in Sage Evolution.
2. Integrate the Tax Type Changes to Paradigm
Paradigm will automatically fetch the following data from Sage Evolution.
- The updated tax percentage of 15% on existing Tax Types.
- New 14% Tax Types which have been created.
Please wait several minutes for the integration to execute. If the changes do not automatically integrate, please contact firstname.lastname@example.org for assistance.
To check if the new tax type data has successfully integrated from Sage Evolution, do the following:
- Navigate to Administration... Setup... Tax Types
- Double-click on the Tax Type to view the Tax %
3. Creating New Transactions
All new documents created in Paradigm will subsequently use the updated tax type percentage.
The tax types used on a transaction are determined by the default tax type configurations on the customer and inventory records maintained in Sage Evolution.
4. Convert Existing Transactions To Use 15%
This section is applicable for an existing transaction which was captured prior to 1 April 2018 and now you want to process the transaction using 15%.
- Open up the document and change the Document Date field.
- Set the field to any date greater than or equal to 1 April 2018.
- Press Save and the transaction will be automatically recalculated using the new tax percentage.
5. Back Date Existing Transactions To Use 14%
This section is applicable for an existing transaction which was captured prior to 1 April 2018 and you still want to process the transaction using 14%. The lines of the transaction will reflect a Tax Percentage of 14%, however, the Tax Type specified is now for 15% as a result of the changes made in Sage Evolution.
If you still want to post this transaction at 14% then do the following.
- Open up the transaction and navigate to the transaction lines grid.
- Open up the column chooser dialog box and add the Tax Type field to the grid. Click here for more information on how to use the column chooser.
- Manually update the Tax Type field for each line by opening up the drop down and selecting the new 14% Tax Type.
6. Back Date New Transactions To Use 14%
This section is applicable if you want to create a new transaction and back date the document to prior 1 April 2018.
- All transactions created after 1 April 2018 will default to use a Tax Percentage of 15%.
- Manually update the Tax Type field for each line by opening up the drop down and selecting the new 14% Tax Type
- Ensure that the Document Date field is still dated prior to 1 April 2018.
Feel free to contact your consultant with regards to this notification.