Exact Globe

Product Updates 421, 420, and 419: XML file enhanced for withholding tax functionality (Italian legislation)

To comply with the latest tax changes for the e-Invoice functionality, effective October 1, 2020, the XML file for the withholding tax functionality has been enhanced. With the recent changes, the withholding tax rate, reason, and nature code information has been made available in the XML file. In addition, the withholding tax amount is not deducted from the total invoice the XML file.

To ensure consistency in the financial overview based on the XML file information, the business logic for the withholding tax has also been enhanced.

The following enhancements have been made in Exact Globe Next and have affected the following menu paths:

Menu paths:

System ➔ General ➔ Countries ➔ Tax codes
Finance ➔ Reports ➔ Italian functionality ➔ Withholding tax reasons
System ➔ General ➔ Settings ➔ General ledger settings
Invoice ➔ Entries ➔ Print / Process
Invoice ➔ Reports ➔ Invoice history
Finance ➔ Entries ➔ General journal
Cash flow ➔ Entries ➔ To be matched

VAT codes screen

In the VAT codes maintenance screen, the new Nature drop-down box has been added and is displayed when the Withholding tax type has been selected. By default, the Nature drop-down box is left blank when creating withholding tax codes.

At the Nature drop-down box, the following options are available for selection:

Nature code	Description
RT01	ritenuta persone fisiche
RT02	ritenuta persone giuridiche
RT03	contributo INPS
RT04	contributo ENASARCO
RT05	contributo ENPAM
RT06	altro contributo previdenziale

Reason code screen

You are now able to define the financial entry type for the reason codes at the Financial entry type field, in the Reason code screen. At the field, the options Sales and Purchase are available for selection.

Note that only the Sales financial entry type can be linked to the reason codes. Otherwise, the Link button is not available if the Purchase financial entry type is selected. For more information, see Product Updates 420, 419, and 418: Withholding tax functionality improved (Italian legislation).

When the Sales financial entry type is selected, the reason and tax codes must be defined. In the case that the defined tax code has been linked to other reason codes, the linking of the financial entry type to the reason codes is not allowed. The following message is displayed:

If the defined tax code has not been linked to other reason codes, the linkage is saved and displayed in the withholding tax reason overview screen.

XML file for sales invoices

DatiRitenuta element block

A new element block, DatiRitenuta, has been added in the XML file. The element is only displayed if the withholding tax codes have the percentage of more than “0”, for the tax code 2 and tax code 3, in the invoices.

There will be multiple DatiRitenuta element blocks in the XML file when the invoices contain more than one withholding tax code. Each block represents one withholding tax code.

The following table illustrates the structure of the DatiRitenuta element block:

Element name	Value
TipoRitenuta	The nature code that has been selected in the VAT codes maintenance screen is displayed at this element.
ImportoRitenuta	The total withholding tax amount for the tax code is displayed at this element.
AliquotaRitenuta	The tax percentage for the tax code is displayed at this element.
CausalePagamento	The reason code linked with the tax code is displayed at this element.

The following is the sample of the DatiRitenuta element block in the XML file:

ImportoTotaleDocumento element block

The value at the element ImportoTotaleDocumento element reflects on the total invoice amount including the withholding tax amount in the XML file.

Ritenuta element block

The Ritenuta element is displayed when the invoice lines contain withholding taxes. The value “SI” is then be displayed at this element.

Business logic of generating the sales invoice entry and payment terms

New fields have been made available in General ledger settings, under the General ledger and Journal sections.

General ledger section

WH tax sales to retain field: Select or type the debtor general ledger at this field.
WH tax sales to deduct field: Select or type the neutral general ledger at this field.

Journal section

Withholding tax field: Select or type the general journal at this field.

The following is the scenario of the generation of the general journal entry to offset the withholding tax amount in the invoice:

Scenario for generation of sales invoice entries and payment terms

VAT table

VAT code	Tax type	Percentage	VAT type
1	VAT	6	Excluding
WH1	Withholding	4	N/A
WH2	Withholding	6	N/A

Invoice lines

Line	Amount	Tax code 1	Tax code 2	Tax code 3	Tax amount 1	Tax amount 2	Tax amount 3
1	300	1	WH1	WH2	18	-12	-18
2	300		WH2			-18

The following are the amounts in the invoice lines:

Total invoice amount = 570
Total WH1 amount = 12
Total WH2 amount = 36

The general journal entry is generated in Exact Globe Next as follows:

The entry reflects the following information:

The withholding tax codes in the invoice are grouped, and the total withholding tax amount for each withholding tax code is reversed from the tax general ledger, and booked into withholding tax sales to deduct general ledger,
the total withholding tax amount for the invoice is reversed from the invoice debtor general ledger, and booked into withholding tax sales to retain general ledger,
the tax term is matched with the tax term of the original invoice,
the entry has the same our reference information as the invoice, and
the entry cannot be edited.

In the debtor card, two additional debtor terms are added under the Receivables option:

In the creditor card, the withholding tax term is no longer displayed under the Payables option:

Business logic of payment reconciliation

The new settings that have been introduced for the generation sales invoice entries and payment terms are also made applicable for the payment reconciliation. In brief, the generation of the general journal entry for payment reconciliation works in reverse from the generation sales invoice entries and payment terms.

When performing the payment reconciliation, the amount to be reversed is based on the receipt amount that is matched to the invoice. In a situation where invoices are partially paid, the amount is be proportionally reversed.

The following scenario is the continuation of the scenario provided for the generation sales invoice entries and payment terms:

Scenario for payment reconciliation

Unmatching invoices

The following are the outcomes when the invoices are unmatched:

The debtor term from both withholding tax offset entry and its reverse entry are unmatched,
if the unmatching is done on a perfectly matched invoice, meaning that the invoice is fully paid on a single receipt, the withholding tax offset reverse entry is voided, and
if the unmatching is done on an invoice that has been matched with multiple receipts, the withholding tax offset reverse entry is not voided. You will be required to manually search for the corresponding withholding tax offset reverse entry and void it.

For more information, see Product Updates 421, 420, and 419: Updated E-Invoice features (Italian legislation) and Product Updates 421, 420, and 419: Support for customized style sheets in E-Invoice (Italian legislation).

Main Category:	Attachments & notes	Document Type:	Release notes detail
Category:		Security level:	All - 0
Sub category:		Document ID:	29.748.639
Assortment:	Exact Globe	Date:	06-10-2020
Release:		Attachment:
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Tags	Legislation-IT Localisation locIT-invoicing LocIT-localtax