York University Division of Finance and Administration

Transcription

1 Yrk University Divisin f Finance and Administratin Standard Operating Prcedure: Wire/Draft t Freign Cuntries Unit(s) Respnsible: Accunts Payable General Accunting Treasury Last updated: June 5, 2013 Descriptin This dcument prvides instructins n hw t cmplete the Wire/Draft t Freign Cuntries Frm. Tpics f instructin included in this dcument are: Definitins Purpse Prcess Chsing the Payment Methd: Wire vs. Draft Instructins n Cmpleting the Wire/Draft Frm Dcumentatin Standards Nn-Resident Withhlding Cntacts Definitins Wire: Draft: An electrnic transfer f funds (thrugh the internatinal banking system) frm Yrk University s bank t the credit f a payee s bank accunt. A frm f cheque, drawn frm Yrk University funds, where payment is generally guaranteed t a payee by the financial institutin that has issued the draft. The draft is a negtiable paper instrument that a payee wuld present t his r her financial institutin fr depsit int his r her accunt. The bank draft wuld be subject t typical clearing prcesses. Purpse Payee: The recipient f funds r in ther wrds, the persn t whm the wire r draft is made ut. The Wire/Draft t Freign Cuntries Frm ( Wire/Draft Frm ) is a frm fr use by internal cmmunity members when requesting payment t an external party lcated utside f Canada r the United States. The frm is used t pay: Vendr invices; Hnrarium and ther remuneratin payments submitted by Payrll staff; Reimbursements t third parties, such as visitrs t Yrk; and Refunds t nn-resident students. Cmpletin f the Wire/Draft Frm cnfirms that the transactin has been apprved by the authrized signing authrity. Prcess The fllwing are the steps that will ccur during the issuance f a wire/draft: 1. The requesting unit will cmplete and submit the Wire/Draft Frm lcated n the Finance website t Accunts Payable. Page 1 f 5

2 2. Accunts Payable reviews and signs ff n the frm. 3. Payment details are inputted int the Western Unin interface by General Accunting staff. (Nte: Western Unin is Yrk s service prvider that issues the drafts and wires.) 4. Each payment is reviewed by the Manager f General Accunting and tw signing fficers. 5. Once the final signing fficer has electrnically apprved the payment, Western Unin will issue the draft r wire t the payee. Western Unin will send an t the payee t infrm them f the impending payment. 6. If Western Unin advises that data is incmplete r des nt match crrectly with their extensive databank f glbal financial institutins, the unit will be cntacted by General Accunting t request further r crrecting inf frm the payee. 7. Upn issuance f the draft/wire by Western Unin, Yrk is then infrmed f the Canadian dllar cst f each payment. 8. General Accunting will charge this cst t the unit cst centres shwn n the Wire/Draft Frm via a jurnal entry, which includes the cst f freign exchange and the fixed fee charged by Western Unin t issue the payment. Any sales tax self-assessment will als be charged. Chsing the Payment Methd: Wire vs. Draft Departments are encuraged t send their payments via wire methd instead f draft. Althugh wires are typically mre expensive than drafts, there is a risk that drafts may nt reach the final destinatin pint because f pr mail service r illegal interceptin, particularly in develping cuntries. Wires are mre cnvenient t the payee because the funds are depsited directly int their bank accunt and delivery time n wires is significantly shrter than drafts. On ccasin in the past, the University has needed t stp payment n drafts and reissue payment via wire, based n representatins that the payee never received the draft. Any cst f reissuing payment will be brne by the unit. Instructins n Cmpleting the Wire/Draft Frm The Request fr Wire/Draft Frm is intended t be an internal frm nly, cmpleted by University persnnel. University persnnel are the nly individuals wh shuld be initiating payments t external third parties. University persnnel may distribute the frm t a payee t cllect address and banking details. Hwever, persnnel are asked t use their judgment when ding s. Please nte that the payee may nly cmplete Sectins B, C, and D. All ther fields are strictly fr internal use nly. 1. On the tp f the frm, please check whether the payee shuld be paid via wire r draft. 2. In Sectin A, specify the currency and amunt wed t the payee. The amunt input in this bx shuld represent Yrk s bligatin t the payee and match that specified n the supprting dcumentatin frm the riginatr (see Dcumentatin Standards table). In Sectin B, please specify the currency that the bligatin (shwn in Sectin A) shuld be paid in. Examples help t illustrate hw these fields shuld be input: A UK bk distributr sends an invice t Yrk fr GBP 1,000. In Sectin A, the user shuld input GBP as the currency and 1,000 as the amunt. In Sectin B, the user shuld input GBP. In this case, the bligatin and payment ccur in the same currency. A visiting schlar frm India is cllabrating with clleagues at Yrk. Yrk has agreed t pay fr her htel csts during her visit t Trnt. The unit and the schlar jintly cmplete the Claim fr Reimbursement Frm shwing ttal reimbursement f CAD $850 fr htel csts. The unit has received an indicating that the schlar wishes t receive the reimbursement in Indian Rupees. On the Wire/Draft Frm, the unit wuld input CAD as the currency and 850 as the amunt in Sectin A. In Sectin B, the unit wuld input INR. Page 2 f 5

3 A Yrk student frm Thailand has a credit balance in her accunt f CAD $4,000. The student has ed Student Accunts requesting a refund, t be paid via wire t her accunt in Thailand denminated in Thai Bhat. In Sectin A, the user shuld input CAD as the currency and 4,000 as the amunt. In Sectin B, the user shuld input THB. Nte that the payment currency selected in Sectin B must be supprted by dcumentatin received frm the payee. Please refer t the sectin titled Dcumentatin Standards. The payee s preference fr currency f receipt will be preferentially hnured, prvided that Western Unin can issue accrding t thse payment specificatins (generally the case, with sme exceptins r cnstraints fr extic currencies). 3. Nte that there is a restrictin t the chice f currency available in Sectin B when Sectin A has been cmpleted with a currency that is nt Canadian dllars. If Sectin A s currency is nt Canadian dllars, then Sectin B can nly be cmpleted with the same currency as shwn in Sectin A. This restrictin exists because the payment system ffered by Western Unin des nt allw using spt rates where tw freign denminatins are invlved in the transactin. Units will face this restrictin n rare ccasins. Shuld a unit have a freign amunt wed t the payee and wish t pay this in a separate freign currency, this can still be accmmdated with ne further step. The unit shuld calculate the cnversin using This OANDA infrmatin shuld additinally be attached t the Wire/Draft Frm. An example best illustrates hw this scenari wuld arise: A prfessr frm the University f Osl is cllabrating with Yrk prfessrs n a majr research grant. This Nrwegian prfessr is cnducting a significant prtin f the field wrk thrughut Eurpe. The prfessr and the Yrk department have jintly cmpleted the Claim fr Reimbursement Frm shwing ttal expenses f EUR 5,695. The prfessr has ed the unit with written ntificatin that he wuld like t receive payment in Nrwegian Krnes. Unfrtunately the Western Unin prtal cannt accmmdate the payment f EUR 5,695 in Nrwegian Krnes using spt rates. Instead, the unit shuld cnvert the Eurs t Nrwegian Krnes using Let s assume the Eurs cnvert t NOK 44,000. The department cmpletes the Wire/Draft frm, inputting NOK 44,000 in Sectin A. In Sectin B, NOK is input. 4. Cmplete Sectin C with the payee s full name and mailing details. The payee name must match exactly with the attached dcumentatin. If the funds are being sent via wire, the payee name must be the full and exact name f the registered bank accunt hlder. 5. If the funds are being sent via wire, prvide all pertinent banking details in Sectin D. If a draft is requested, this infrmatin can be mitted. 6. In Sectin E: Specify the reasn fr the payment. Please prvide as many details as pssible; ften the infrmatin is nt apparent n the supprting dcumentatin (due t abbreviatins r freign languages). Als input the chartfields needed t charge the payment. The accunt, fund, and cst centre are mandatry fields while the activity, time, and lcatin fields are ptinal. Specify the rebate rate fr each chartfield line. Accunts Payable staff requires the rebate percentage t calculate the sales tax self-assessment, if required. Under the amunt clumn, please use the same currency denminatin as Sectin A. Nte that the amunt will be cnverted t Canadian dllars and charged t the cst centre(s) by General Accunting when the exchange rate f the payment is determined. Input the HST rebate amunt, if eligible t be claimed. Nte that criteria must be met befre the HST rebate may be claimed. Fr a vendr invice, the vendr must be charging Canadian HST and must shw their registratin number n their invice. Fr an expense claim, the rebate must be calculated n eligible expenditures made in Canada using the rebate factr shwn n the Claim fr Reimbursement Frm. If an HST rebate is being claimed, the amunt(s) charged t the chartfields must include any nnrebatable HST. The ttal f the chartfield lines (which wuld include nn-rebatable HST) and the HST rebate line must equal the amunt n the vendr invice, Claim fr Reimbursement Frm, etc. Page 3 f 5

4 7. Sectin F is fr internal use by Accunts Payable and General Accunting nly, hwever University units shuld be aware f its use. Where gds and services are imprted int Canada frm ther cuntries, and the gds and services are cnsidered taxable fr HST purpses, the University is respnsible fr self-assessing the tax when the vendr has nt charged the full HST. Accunts Payable staff will review the payment, and make a determinatin if HST shuld be self-assessed. As a general rule, University units shuld expect incremental charges fr HST (abve and beynd the vendr invice) where they are imprting gds r services. Accunts Payable staff is respnsible fr reviewing the HST implicatins fr payments, and ppulating this sectin. General Accunting staff is respnsible fr keying this infrmatin via jurnal entry int the general ledger. 8. In Sectin G and H, please identify the preparer and signing authrity. Nte that the apprver must be a recgnized signing fficer (against the cst centre) in the Finance PepleSft system. Paperwrk must be in place befre an individual can sign-ff n cst centre transactins. 9. Sectin I is fr internal use by Accunts Payable and General Accunting nly. This area shws the relevant sign-ffs that must ccur befre the payment is issued. The frm must be submitted with apprpriate dcumentatin utlined in the table belw. Any frms received by Accunts Payable that are incmplete will nt be prcessed, and will instead be returned t the preparer. Dcumentatin Standards The table belw lists sme f the cmmn payments made via the Wire/Draft Frm and the crrespnding dcumentatin that is needed. Type f Payment Vendr Payment fr Gds and Services Hnrarium and Other Payments Submitted by Payrll Staff Reimbursement t Third Parties Refunds t Nn- Resident Students Required Dcumentatin Original vendr invice. Duplicates r cpies are nt acceptable. Invice must be addressed as fllws: Yrk University (Department r Faculty name) (r ther fficial Yrk University place f business) 4700 Keele Street Trnt, Ontari M3J 1P3 If the vendr is charging Canadian HST, the vendr s HST registratin number must be displayed n the invice. The vendr invice must clearly indicate the currency f payment. Nn-Resident Payment Frm, cmpleted in full with sign-ff by Payrll staff. Nte that the cmpletin f the Nn-Resident Payment Frm is managed by Payrll and must meet Payrll standards. Payrll, in cnjunctin with the submitting unit, must ensure that the payment currency has been cnfirmed with the payee. Claim fr Reimbursement Frm, cmpleted in full with sign-ff by authrized signing authrity r authrities. Original receipts must accmpany the Claim fr Reimbursement Frm where cst centres in either fund 400 r 500 are charged. In all ther cases, the submitting unit shuld retain the receipts accrding t their established practices and the Reimbursement f Expenses prcedure. The submitting unit is respnsible fr cnfirming in writing with the payee which currency they prefer t receive. Prf f Yrk s bligatin t the student. Examples f apprpriate dcumentatin include: a reprt frm the Student Infrmatin System shwing the utstanding student balance a YUELI Cancellatin Request Frm The submitting unit is respnsible fr cnfirming in writing with the payee which currency they prefer t receive. Nn-Resident Withhlding Nn-residents wh prvide services in Canada will be subject t withhlding tax, generally calculated at the rate f 15%. Page 4 f 5

5 Accrding t the Canada Revenue Agency, nn-residents f Canada: nrmally, custmarily, r rutinely live in anther cuntry and are nt cnsidered a resident f Canada fr tax purpses; r d nt have residential ties in Canada; and live utside Canada thrughut the tax year; r stay in Canada fr less than 183 days in the tax year. Withhlding is applicable t nn-residents regardless f whether the services are prvided as individuals (self-emplyed), crpratins, participants in jint ventures, r as members f partnerships. Units wh submit payment t nn-residents fr services perfrmed must clearly indicate the lcatin where the services were perfrmed. Payments t nn-resident individuals (i.e. thse wh are prviding services under a prper first name/surname basis) must be submitted t Payrll Services n a Nn-Resident Payment Frm. Payrll Services will administer the withhlding tax accrding t their standard practices and will subsequently arrange fr payment t be issued via wire r draft. Payments t nn-resident third party vendrs (i.e. thse wh are prviding services under a cmpany name) must be submitted t Accunts Payable n a Wire/Draft Frm with an riginal vendr invice attached. Accunts Payable will calculate and withhld the apprpriate amunt f tax and the after-tax payment will be remitted t the vendr. Accunts Payable will remit the withhlding tax t the Canada Revenue Agency and n an annual basis will supply a T4A-NR Slip t the vendr t reprt the amunt f withhlding taken. Cntacts Fr further infrmatin n the Wire/Draft Frm, please cntact Accunts Payable at (416) Fr questins n the status f a particular draft r wire, please cntact General Accunting at (416) ext Page 5 f 5