% Tax Deduction for Royalities

For services of the type authors and/or inventors rights, the customer must carryout retention on the source of the VAT for a certain percentage of the VAT when it is paid. This retention must be carried out on the invoice in order that it can be taken into account in the DAS2 extraction. The amounts to be declared at 1099 level are of the following two types:

• amount for the fees Tax-incl (without taking the retention into account);
• Net VAT, which is equal to 4.7% of the gross amount (that is to say before deduction of miscellaneous charges: AGESSA, Maison des Artistes, CSG and CRDS). This amount must be declared in a "Net VAT on authors rights" basis in a VAT account 44552 identified by the label DAS2, the sign for the balance of this account must be of the creditor type. The "Net VAT on authors rights" DAS nature is therefore always declared as itself (without taking into account the sign of the posting but rather that of the sign of the balance for the account) and in addition the nature of the "Authors rights" or "Inventors rights".

This parameter is therefore used to recover the paid amount from the difference between the VAT applied to the invoice (5.5% for the authors rights) and the percentage for the deduction that is in practice fixed at 4.7% of the gross amount. This percentage can vary according to the companies.

For instance:

• Invoice for authors rights 1055 EUR the 01/12/03 (where the VAT on authors rights = 5,5%)
• Retention of 4.7% VAT, applicable on 1000 EUR Ex-tax in the invoice.
• Payment of 1008 EUR the 20/12/03
• 2003 declaration: 1055 EUR for Authors rights and 47 EUR retained at the source of the VAT (this latter being entered from the invoice).

446	AUTHOR01		1008
651		1000
4456		55
4452			47

Note:

• the amount declaration algorithm, even though declared with Tax incl, searches for the Ex-tax amounts and based on the tax code recalculates a Tax incl amount.
• thus, following the example shown above, to retrieve the amounts to be mentioned on the declaration, Sage X3 carries out the following calculations:
• Search within the matching group, for the invoice (1055 EUR Tax incl)
• Search for the fee type and the Ex-tax fee amount: 1000 EUR
• Recalculates the fee amount sent to be declared by application of the Ex-Tax amount * [(Retained at VAT 4.7%)+(VAT 5.5%- Retained 4.7%)], that is: 1000*(1.047+ (1.055-1.047)=1055.
• The difference between the VAT on the invoice and the retention at source (5.5-4.7) is the value that will appear in this parameter: 0,8.  
• 5 fee lines are extracted in this specific case:

- the ex-tax line: 1000

- the applied VAT: 55

- the retention: 47