MDET_User Training Material - R2 v2

8/10/2019 MDET_User Training Material - R2 v2

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Medical Device Excise

Tax (MDET)

User Training

Release 2


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2013 KPMG LLP, a Delaware limited liability partnership and the U.S. member f irm of the KPMG network of independent

member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved.

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Medical Device Excise Tax (MDET)

Topics Covered

Topic Page

1.Executive Summary 3

2.System Overview 4

1.Accessing the KPMG MDET Processing System 5

2.Definitions 7

3.System Navigation 8

1.Navigation Overview 9

2.Home Page 10

3.Manage Tax Payments Period Page 11

4.Reporting 13

5.Entity View 18

4.System Processing Logic 19

1.MDET System Process Flow 20

2.List of Input Data Files 21

3.Architecture Diagram 22

4.Upload Process 23

5.Processing Order 24

6.Validation 25

7.Allocations and Tax Calculation Processing 26


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Topics Covered (continued)

Topic Page

8.Allocations 27

9.Allocation Rules Overview 28

10.Tax Calculations 29

11.Managing Tax Periods 34

5.Reporting Overview 37

1.MDET Tax Preparation Summary Report 40

2.MDET Invoice Line Detail Reports 50

3.MDET Tax Invoice Line Detail Report 53

4.MDET Credit Invoice Line Detail Report 60

5.Sales Invoice Line Detail Report 66

6.Data Inquiry / Information Review Reports 69

7.File Status Reporting 77

8. MDET File Upload Status Grid 80

6. Appendix 84

1.MDET File Creation Template 94


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Executive Summary

Affordable Care Act Section 4191, which is effective from January 1, 2013, imposes tax on the

sale of any taxable medical device by the manufacturer or importer.

The Medical Device Excise Tax (MDET) applies to the sale of certain medical devices by the

manufacturer or importer of the device in an amount equal to 2.3 percent of the sale price.

The solution computes MDET based on client's supply chain transactions and allocations of

waterfall items in accordance with IRS regulations and related guidance necessary to compute the

taxable amount.

The MDET solution is hosted within the KPMG private cloud. Users can access the application

through a web-browser.


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Tax (MDET)

System Overview


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Accessing KPMG MDET Processing System

1. User logins

To access KPMGs MDET system, user login ids will need to pre-provisioned in KPMGs Membership Servicesmodule. The appropriate access credentials and security permissions need to be established prior to logging into the

system.

New users should contact the MDET coordinator.

MDET coordinator will contact KPMG service desk with a completed new user setup form.

Service desk will inform the new users with instructions to access the system.

2. System URL

KPMG MDET System can be accessed via the following URL.

https://mdet.us.kpmg.com

3. Supported Web-browsers

Internet Explorer (IE 7, 9)


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Accessing KPMG MDET Processing System (cont.d)

4. Role Based Security Permissions

Currently all users have the same access profiles and permissions.

Role based user security will be incorporated into the system in a future release.

5. Entity Based Views

All the information and data displayed on various screens is pertinent to a single entity.

Users are presented with a list of entities, which they are authorized for and will have the ability to select an entity to

view.

This functionality is explained further in the System Navigation section.


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Definitions

7 Definitions

No Acronym Definition

1 MDET (Medical Device Excise Tax) Section 4191 imposes tax on a manufacturers or importers sale ofa taxable medical device

2 CSP (Constructed Sale Price) Section 4216 (b)(2) provides a special rule under which a

manufacturer shall determine a constructive sale price for his sales

of taxable articles at retail, and to retail dealers, under certain

conditions.

3 Customer Wholesale Distributor, Retailer or End-User to whom the client sells

products

4 Client Entity liable for MDET. Could be a medical manufacturer or importer

of medical devices. A manufacturer includes any person that

produces a taxable article. An exporter brings a device into the

United States from a source outside the United States.

5 Taxable Basis Tax is based on sale price and, generally, sale price is the price

(consideration) for which a taxable medical device is sold. In certain

cases, a constructed sale price is substituted for price for whichthe device is sold.

6 Active Quarter (Active Period) The quarter for which MDET calculations are being processed.


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System Navigation


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Navigation Overview

This section explains the various pages and links available in the application. Listed below are the various links

available to a user:

Home Link at the top right corner can be clicked to return to the home page from any other part of the application.

Manage Tax Periods Displays the current status of the Quarter Period, as well as the key dates associated with

the closing or the date the quarter was marked as filed.

Reports Enables users to run several types of reports through a series of drop-downs.

Entity Users can view a list of entities (permitted for this user) in the Entity drop-down menu and select entities

from this drop-down to view data related to the selected entity and run reports.

Help Link is available in the top right corner of the screen, will include general information about the application.

Logoff Link located in the top right corner of the screen can be clicked to exit the application.


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Navigating through KPMG MDET Processing System

1. Home Page

This page is a placeholder for dashboards and advanced functionality in future releases.


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Navigating through KPMG MDET Processing System (cont.d)

2. Manage Tax Payment Periods Page

The Manage Tax Payment Periods page displays the status of current and prior Quarter periods beginning with the current

Quarter, as well as the key dates associated with the closing or filing of the Quarter.

Manage Tax Periods Grid has the following columns:

Quarter - Current and prior Quarter Periods beginning with the current Quarter.

Period Start Date - The Period Start Date displayed is the start date of the quarter.

Period End Date - Period End Date displayed is the end date of the quarter.


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Navigating through KPMG MDET Processing System (cont.d)

2. Manage Tax Payment Periods Page (continued)

Automatic Close Date The Automatic Close date displays the date on which the quarter will be Closed by the

system if it is not manually closed, which is typically one month following the quarter end date. If a quarter is re-opened,

the user will be prompted to select a new Automatic Close Date, which can be set for a maximum of 60 days followingthe current date. Once a quarter period is re-opened and a new Automatic Close Date is set, the new date will display in

the appropriate column in the grid and the quarter will be automatically Closed on that date if it is not manually closed

at an earlier date.

Status The Quarter Period can be Open, Closed or Filed. User may select to set status of a Quarter to Closed.

Users may also Re-Open a Closed Quarter which the user will be prompted to select an Automatic Close Date

Allocations Current? The grid also displays the current status of the quarter (as Open, Closed, or Filed). The gridalso visually displays if the allocations for the quarter are current () or not current (X).

Closed Date The Closed Date will display the date in which the quarter status was changed to Closed, whether

automatically or manually.

Filed Date The Filed Date will display the date in which the quarter status was changed to Filed.

Update the Period Status This drop-down functionality enables users to Close or Re-open or File a selectedQuarter Period.


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Reports Management

3. Reporting

Users have the ability to run multiple reports from the KPMG MDET Processing System. The reports can be accessed by

hovering over the Reports drop down in the top center section of the site and selecting the desired report .


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Reports Management

3. Reporting (continued)

For instance, select the File Upload Status report and a new report window will display with the filter information.

Select the FileType and UploadStatus as Select Al l and enter a desired date range. Click on the View Report

button to display the contents of the report.


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Reports Management


Clicking on the Open link displays the details of the Input File.


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Reports Management


Clicking on the Export icon displays the different file formats available to extract the report contents.

Selecting a desired file format opens a new file (of chosen format type) and displays the report contents.


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Reports Management


Report Types

Tax Preparation Reporting - The MDET processing tool enables users to generate reports that can be used as aninput to the Clients tax preparation and reporting process. These reports provide key figures used in the creation of

estimated payments (deposits) and quarterly returns.

Invoice Line Detail Reporting Users may generate reports on a more granular level, down to the invoice line item.

This report allows users to review the data used to calculate key figures such as the In Period Medical Device Excise

Tax, any Out of Period Tax Readjustments, or Total Sales for each line item.

Data Inquiry / Information Review - The MDET processing tool enables users to perform inquiries on the productiondata which was used to calculate estimated payments and returns.

File Status Reporting Users may view the status of files which have been submitted to the tool for processing.

These reports inform users on successful data loads, start and finish times, and data errors or warnings encountered.

Sales Tieout Reporting Users may compare sales and adjustments as recorded in the MDET Processing Tool to

sales and adjustments recorded in the entitys financial systems. The report will provide key sales figures taken from

the MDET Processing Tool for trade and affiliate sales as well as rebates, freight and other adjustments recorded.

MDET Tax/Sales Product Transfer Detail Reporting Users may generate reports which will provide the key figures

used in the creation of estimated payments (deposits) and quarterly returns.

Transfer Allocation and Analysis Reporting - Users may generate reports to compare actual sales at the sales

company to the estimates sales used to categorize material transfers for MDET purposes from the Manufacturer to the

sales company.


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Navigation Overview

4. Entity View

This functionality is situated on the top right corner and is available on all screens.

A list of entities is available to users on the top right corner of the Home page.

Only the entities allowed to view by each user is permitted in the drop-down list.

Users can make a selection from this drop-down menu.

All data and information on the Manage Tax Payments Period and Reports screens is related to the chosen entity.


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Tax (MDET)

System Processing Logic


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MDET System Process Flow

Upload InputFiles

Allocations and Tax Calculations Processing Reports


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Upload Input Data Files

1. List of Input Data Files Uploaded by Client

Master Data Files

Customer master data file Details of customers to which products were ultimately shipped to for each entity.

Product master data file Details of all products for a given entity.

Entity master data file Onetime set up file having entity details.

Transaction Data Files

Invoice Transaction data file Contains invoice transaction details.

Adjustment file Contains several type adjustments (such as insurance, installation, training, quickpay discount etc)

Shipping information file Details of transportation expenses.

Rebates information file Details of rebates granted to customers.

LRP transaction data file Contains Lowest Regular Price (LRP) sales amounts and transfer sale percentage

estimates, by ProductID, by Entity.

Transfer transaction data file Includes Manufacturer Entity Transfer detail information, with indicator of which Sales

Company was the recipient.

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Architecture Diagram

Upload InputFiles



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2. Upload process

Automated All input files can be uploaded to KPMG MDET system from an automated client system

such as MBOX, MFT and Ipswitch File Transfer.

Manual upload Input files can also be uploaded by users into the KPMG MDET system via secure FTP.

SFTP file location (KPMG) sftp.us.kpmg.com

Users can manually upload encrypted and zipped Input Files using FTP or SFTP protocols compliant

client software.

The login and password credentials for accessing the KPMG SFTP location can be obtained from the

KPMG MDET coordinator.

Upload InputFiles



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3. Processing order

Multiple files in one zip containerWhen a zip containing multiple files are uploaded, the files are unzipped and processed in the following

order:Customer master file

Product master file

Invoice transaction file

LRP transaction file

Transfer transaction file

Freight fileRebate file

Adjustments file

Single file in zip container

When a zip containing single file is uploaded, the files are unzipped and processed in the order they are

uploaded.

To increase the likelihood of successfully processing, the input files must be uploaded to the tool in theabove order.

Upload InputFiles



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4. Validation

All data in the input files received are validated by the KPMG MDET system with the following business rules defined

in the functional specifications for Client Input Data Processing document.

Some examples of the business rules are :

Data referential integrity check

Required fields validation

Validation of numeric values for numeric fields Character length validation

Expected values check

Input data file upload status:

Clients can view the status of each file uploaded in the tool via File Status Upload Report.

Users can determine which file uploads were successful and which were unsuccessful. It also gives

the details of the data errors encountered during an unsuccessful upload.

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System Processing

Allocations and Tax Calculation Processing

Allocations and Tax calculations are processed every 4 hours starting 12 a.m. Processing schedule sequence isbelow:

12 a.m., 4a.m., 8a.m., 12p.m., 4p.m., and 8p.m.

The allocations routines are run depending on the input data files that were uploaded since the last run. For e.g. if

only Shipping file was uploaded since the previous processing, then only the shipping allocation routine will be

processed. However tax calculations routines will be processed every 4 hrs if any new input data files have been

uploaded.

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Allocations

1. Allocations

The various allocations that are processed and are applied proportionally to applicable Invoice Line Items prior to

calculating the MDET tax are:

Allocations paid by Client [Expense]

Shipping charges paid by client

Product rebates paid by client

Performance rebates paid by client

Adjustment charges paid by client Discounts granted to customer at the time of sale

Discounts granted to customer after sale

Allocations paid by Customer [Revenue]

Shipping charges paid by customer

Adjustment charges paid customer

Total Allocation Amount = Allocations paid by Customer - Allocations Paid by Client

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Allocations

2. Allocation Rules Overview

Period Start Date and Period End Date on the header of the allocation input data files determine the period in whichthe financial activity has occurred.

FromAdjustmentDate and ToAdjustmentDate on the adjustments input file determines the period to which this

financial activity will be applied. These dates are defined as FromRebateInvoiceBillingDate and

ToRebateInvoiceBillingDate on rebates input file and as FromShippingDate and ToShippingDate on shipping input

file.

Rebates Rebates received in current or active quarter can be processed.

Rebate IDs for closed or filed periods can not be updated.

The amount paid by the client may be captured at the entity level, customer level, invoice level or invoice line

item level.

Rebates paid to the customer are Product Specific and Customer Performance allocated.

Shipping

Shipping Charges paid by the customer are stated within the invoice as a separate line item or a single charge

need to be allocated to every applicable item on the invoice.

Shipping Charges paid by the client may be captured at entity level, invoice level, or invoice line item level.

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Allocations (Continued)

2. Allocation Rules Overview

Adjustments

Allocation of Insurance, Installation and other adjustments paid by the customer need to be allocated to every

applicable item on the invoice.

Allocation of Insurance, Installation and other adjustments paid by the client can be received on the entity

level, invoice level, and invoice line item level.

Allocation of adjustment charges paid by customer and allocations of adjustment charges paid by the client

can occur, and will need to be allocated, for the same transaction. That is, both allocations for adjustment

charges paid by the customer and allocations for actual adjustment costs paid by the manufacturer/importerentity will need to be allocated.

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In Period Tax Processing

3. Tax CalculationsMDET tax determination for in-period invoices for each invoice line item is as follows:

Upload InputFiles



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In Period Tax Processing

3. Tax Calculations (continued)(In-Period Invoices)

All invoices that were received in the quarter (identified using the Period Start Date and Period End Date) are selected

for processing.

Invoice Line Items that are Service, Discount, Warranty and Freight are not, themselves, subject to MDET but may be

allocated to device line items that are subject to MDET.

The constructed basis is calculated for all Invoice Line Items.

Total Allocation Amount is calculated for each item.

Taxable basis, based on scenarios, is calculated.

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2013 KPMG LLP, a Delaware limited liability partnership and the U.S. member f irm of the KPMG network of independentmember firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved.

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Out of Period Tax Processing.

Upload InputFiles


3. Tax Calculations

MDET out of Period Tax Credit

process for all applicable

invoices that received an out

of period allocation is as

follows:

M di l D i E i T (MDET)


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Upload InputFiles


3. Tax Calculations (continued)(out-of-Period Invoices)

All invoices with out of period allocations and for which MDET tax was paid, are selected for

processing.

For each selected line item, the following is calculated

Cumulative Out of Period Allocation

Current Out of Period Allocation

Cumulative MDET Tax Credit

Constructed Price Benefit

If the Cumulative Out of Period Allocation > or = Constructed Price Benefit then MDET tax creditfor each item is calculated and a check whether the sum of MDET tax credit and Current Quarter tax

credit exceeds the MDET tax paid, is made. If so then the MDET tax credit for the current quarter is

updated and stored else the Current Quarter tax credit is retained and stored.

If the Cumulative Out of Period Allocation < Constructed Price Benefit, then Total Out of Period

Allocation is calculated and compared against the Constructed Price Benefit, to check if it is in

excess. If so, then the Current Quarter MDET tax credit is calculated. If not, Current Quarter tax

credit is set to zero.

If the sum of Cumulative MDET Tax Credit and Current Quarter MDET Tax Credit > MDET Tax,

then the MDET tax credit for the current quarter is updated and stored. If not, the Current Quarter tax

credit is retained and stored.

M di l D i E i T (MDET)


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Upload InputFiles


3. Tax Calculations (continued)(out-of-Period Invoices)

Derived Terms

Cumulative Out of Period Allocation is the total of all Out of period Allocations receivedin the prior quarters (MDET Tax Excluded if applicable)

Current Out of Period Allocation is the total of all out of period allocation received in the

current quarter (MDET Tax Excluded if applicable)

Cumulative MDET Tax Credit is the total of all prior quarter MDET Tax Credit for the line

item

Constructed Price Benefit = [Taxable Basis*(1 -Scenario multiplier)]

(Note: Scenario multiplier is based on the Invoice Line Item Scenario)

Total Out of Period Allocation is obtained by adding Cumulative and Current Out of

Period Allocations.

IfCumulative Out of Period Allocation > or = Constructed Price Benefit

MDET Tax Credit for current quarter= Current Out of Period Allocation * Tax Rate

IfTotal Out of Period Allocation > or = Constructed Price Benefit

MDET Tax Credit for current quarter= (Total Out of Period Allocation

Constructed Price Benefit) * Tax Rate

If the Cumulative MDET Tax Credit + Current Quarter MDET Tax Credit > MDET Tax

MDET Tax Credit for current quarter = MDET Tax Cumulative Tax Credit



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Managing Tax Periods

4. Managing Tax Periods

Manage Tax Payment Period Page on the application displays the status of the allocation and calculations process. It also

displays the status of current and prior Quarter periods beginning with the current Quarter, as well as the key dates associatedwith the closing or filing of the Quarter.

Allocations current?

The Manage Tax Payment Period page visually displays if the allocations for the quarter are current () or not current

(X).

If all allocations have been run and completed, the field will display a green check mark () icon.

If all allocations have not been run and completed, the field will display a red X.

Opening a period

The System will automatically Open a Quarter Period on the Period Start Date. The System can now accept input

files to be uploaded for the newly opened period.

When a status is labeled as Open, data relating to that quarter is active and can be accessed and modified, input

files can be imported and adjusted, and allocations and calculations can be run and updated.

Users have the capability to run reports on Open quarters data.

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4. Managing Tax Periods (continued)

Closing a period

If there are any pending allocations or tax calculations, the quarter period status will change to Closed (automatically

or as manually updated by the user) and then all allocations and tax calculations will run.

A user can only manually close a quarter period if the current date is a date later than the Period End Date. When a

status is labeled as Closed, data relating to that quarter cannot be modified, data files cannot be imported or adjusted for

that quarter, and calculations cannot be changed.

While rebate and adjustment data can and will be allocated to Out of Period invoice transactions, no files can be

imported and no tax calculations can be performed on Closed quarters.

Users have the capability to run reports on Closed quarters data.

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4. Managing Tax Periods (continued)

Filing a period

Once a quarter period is Closed the user has the ability to change the status to Filed by selecting the radio button

next to the desired quarter period and choosing Filed under the Update the Period Status drop down menu.

Quarter periods can only be changed to the status of Filed if the quarter is closed and if the current date is a date

after the Period End Date.

When the quarter period status is Filed, the quarter period is permanently locked, data file import and processing is

prohibited, and users will not have the ability to re-open the quarter period.

Users have the capability to run reports on Filed quarters.

Future functionality is contemplated which will allow users to create an Amended Return Period, the starting point for

which is the data version created when the Quarter Period was marked Filed.

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Medical Device ExciseTax (MDET)

Reporting Overview


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Reporting Overview

MDET Reporting falls into the following categories:

1. Tax Preparation Reporting

Can be used as an input to the Clients tax preparation and reporting process.

Provide key figures used in the creation of estimated payments (deposits) and quarterly returns.

2. Invoice Line Detail Reporting

Enables users to generate reports on a more granular level, down to the invoice line item.

Allows users to review the data used to calculate key figures such as the In Period Medical Device Excise Tax,

Out of Period Tax Readjustments, or Total Sales for each line item.

3. Data Inquiry / Information Review

Enables users to perform inquiries on the production data which was used to calculate estimated payments and

returns.

Allows users to detail review, field for field, data imported into the system.

4. File Status Reporting

Enables users to view the status of files that have been submitted to the tool for processing.

Informs users on successful data loads, start and finish times, and data errors or warnings encountered.


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Reporting Overview (continued)

5. Sales Tieout Reporting

Enables users to compare sales and adjustments as recorded in the MDET Processing Tool to sales and adjustments

recorded in the entitys financial reporting systems. Provides the key sales figures taken from the MDET Processing Tool for trade and affiliate sales as well as the

rebates, freight and other adjustments recorded.

6. Product/Sales Transfer Detail Report

The report will provide the key figures used in the creation of estimated payments (deposits) and quarterly returns.

The report will show the elements used to determine the MDET Tax and Sales amount for each unique ProductID,BatchNumber, and SalesEntityID combination.

7. Transfer Allocation and Analysis

Enables the user to compare Actual Sales at the Sales Company to the Estimated Sales used to categorize material

Transfers for MDET purposes from the Manufacturer to the Sales Company.

The Report will also analyze deficit or excess export quantities and calculate any necessary MDET due or MDET

refund available.


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Reporting Scope

Reporting Capabilities

The following items have been identified as being in scope for Release 1 of the application:

Reporting at the single entity level (based on EntityID)

Reporting supports bi-monthly estimated payments

Reporting supports quarterly tax returns

Reports can be displayed online

Report can be downloaded to the local workstation, either in Adobe PDF or Microsoft Excel


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Reporting

MDET Tax Preparation Summary Report


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MDET Tax Preparation Summary Report - Overview


Provides users with an overall summary of the sales, allocations, constructed price, taxable basis, tax and tax credits

for transactions subject to MDET for each time period being reported.

Summarizes

Total Sales amounts

In Period sales and tax figures

Out of Period allocations and applied credits

Allows users to click through on key figures to view the Invoice Line Details report (discussed later).

Provides users with a summary of the key figures which may be used in the creation of estimated tax payments and

returns for each quarter.

MDET Tax Preparation Summary Report - Allocation


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MDET Tax Preparation Summary Report Allocation

Status

Allocation Status for Reporting

Current defined Allocations and tax calculations for a period are current if there have not been any files

uploaded for the period any time after a scheduled or manual allocation and tax calculation process has run.

Warning Message

If the data allocations and tax calculations are current, the system displays the message Allocations and tax

calculations are current on the reports page.

If the data allocations and tax calculations are NOT current, then the system displays the message Allocations

and tax calculations are pending for the current quarter on the reports page.

When a user initiates a report:

If data allocations and tax calculations status are current The report will generate as requested.

If the data allocations and tax calculations status are NOT current

The user will receive a warning message with the option to do ONE of the following:

Continue the report generation using the production data as-is (NOT RECOMMENDED)

Cancel the report

If the user chooses to run the report using noncurrent data allocations and tax calculations, the report is

generated and will display the text Warning: Allocations Are Not Current on the report.

MDET T P i S R Fil


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MDET Tax Preparation Summary Report - Filters

Users have the ability to filter the MDET Tax Preparation Summary Report by the following:

Year

Quarter

Date Range

MDET T P ti S R t


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MDET T P ti S R t


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MDET Tax Preparation Summary Report- Column Details

Period Status displays if the period is Open, Closed, Filed, or N/A (used for

quarters prior to being open for the first time).

Filed Date displays the date that the Period Status was changed to Filed, if applicable.

Supply Chain Group displays the Supply Chain Scenario that the Customer falls under

for MDET purposes.

Scenario 1 sale to Unrelated Retailer

Scenario 2 sale to Unrelated End User

Scenario 3 sale to Related Retailer

Scenario 4 sale to Related End User

Note: Release 1 supports Scenarios 1 and 2 only

Customer Account Group displays the Customer Account Group that the Customerfalls under for MDET purposes.

Retailer

End User

MDET Tax Preparation Summary Report Column Details


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Sales Subject to MDET

Displays the total of the sales that are subject to MDET for all invoice lines meetingthe data selection criteria.

Clicking on this field will generate the Sales - Invoice Line Detail report.

Calculated Value = Extended Price + Sales Tax

In Period Allocations

Displays the total of all In Period adjustments that have been allocated for all invoice

lines meeting the data selection criteria.

Clicking on this field will generate the MDET Tax - Invoice Line Detail report.

MDET Excluded

Displays the medical device excise tax that has been excluded from the MDET

calculation, if the MDET is not separately stated.

The formula in section 48.4216(a)-2(a)(2) is used to compute the tax-excluded price.




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Constructed Price

Displays the total extended price, plus applicable sales tax, plus or minus total

allocations, minus applicable MDET included amount for all invoice lines meeting thedata selection criteria.


Calculated Value = Sales Subject to MDET +/- In Period Allocations MDET

Excluded

Scenario Multiplier displays the configured percentage, based on supply chain scenario,

used to calculate the taxable basis for all invoice lines meeting the data selection criteria.

Taxable Basis

Displays the total amount used as the base for the Medical Device Excise Tax

computation for all invoice lines meeting the data selection criteria.


Calculated Value = Constructed Price * Scenario Multiplier



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Tax Rate displays the configurable rate of excise tax.

MDET

Displays the total Medical Device Excise Tax due for all invoice lines meeting the data

selection criteria.


Current Out of Period Allocations

Displays the total of all Out of Period allocations for the quarter period.

Out of Period allocations are price readjustments that have been credited to the

purchasers account with respect to a medical device sale in a quarter period prior to

the current quarter period.

Clicking on this field will generate the MDET Credit - Invoice Line Detail report.



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Out of Period Applied to Credit

Displays the total of the Out of Period allocations that are allowed to calculate the

MDET Credit for the quarter period.

Certain thresholds, such as the Constructed Price Benefit, need to be surpassed in

order for Out of Period readjustments to apply for a credit.


Net MDET Credit

Displays the total Medical Device Excise Tax credit that can be claimed for the quarter

period.


Net Tax

Displays the net MDET tax amount for the period.

Note: This amount is to be used for informational purposes only.

Calculated Value = MDET + Net MDET Credit


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Reporting

MDET Invoice Line Detail Reports

MDET Invoice Line Detail Reports - Overview


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MDET Invoice Line Detail Reports - Overview

MDET Invoice Line Detail Report

Enables users to generate reports on a more granular level, down to the invoice line item.

Group of reports includes 3 types that allow users to review the data used to calculate key figures:

MDET Tax Report for details on In Period Medical Device Excise Tax

MDET Credit Report for details on Out of Period Tax Readjustments

Sales Report for details on Total Sales for each line item

Allocation Status similar to the Tax Prep Report, the user will receive a warning message and option to continue

with or cancel report generation if allocations and tax calculations are not current.

MDET Invoice Line Detail Reports - Filters


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MDET Invoice Line Detail Reports Filters

MDET Invoice Line Detail Report

For all 3 reports in the Invoice Line Detail Reporting group, the user has the ability to filter the report by choosing or

entering the following:

Operating Company Code

Invoice ID

Invoice Date Range

Customer ID

Customer Account Group

Product ID

The option to include, exclude, or display only:

Non FDA listed medical devices Cancelled, zero, return, debit, or credit invoices

Invoices excluded from MDET calculation

Products excluded from MDET calculation


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Reporting

MDET Tax Invoice Line Detail Report



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MDET Tax Invoice Line Detail Report Column Details


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Total Sales displays the total sales for the invoice line meeting the data selection criteria.


ADJ01 Installation

Displays the total of all In Period installation adjustments that have been allocated to

the invoice line meeting the data selection criteria.

Installation allocations can originate from:

Invoice line items (revenue side)

Adjustment input files indentified as ADJ01 (expense side)

ADJ02 Insurance

Displays the total of all In Period insurance adjustments that have been allocated tothe invoice line meeting the data selection criteria.

Insurance allocations can originate from:





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ADJ03 Discounts

Displays the total of all In Period discount adjustments that have been allocated to the

invoice line meeting the data selection criteria.

Discount allocations can originate from:

Invoice line items

Invoice header information

Adjustment input files indentified as ADJ03

All discount allocations will reduce the tax basis.

ADJ04 Quick Pay

Displays the total of all In Period Quick Pay discount adjustments that have been

allocated to the invoice line meeting the data selection criteria.

Quick Pay discount allocations can originate from adjustment input files indentified as

ADJ04.

Quick Pay discount allocations will reduce the tax basis.



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ADJ05 Other

Displays the total of all In Period other adjustments that have been allocated to theinvoice line meeting the data selection criteria.

Other allocations can originate from:



Shipping

Displays the total of all In Period shipping adjustments that have been allocated to the


Shipping allocations can originate from:


Invoice header information (revenue side)

Shipping adjustment input files (expense side)



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Rebates

Displays the total of all In Period rebate adjustments that have been allocated to the


Rebate allocations can originate from rebate adjustment input files.

Rebate allocations will reduce the tax basis.

Total In Period Allocations displays the total of all In Period adjustments that have been

allocated for the invoice line meeting the data selection criteria.

MDET Excluded

Displays the medical device excise tax that has been excluded from the MDETcalculation, if the tax is not separately stated, for the invoice line meeting the data

selection criteria.

The formula in section 48.4216(a)-2(a)(2) is used to compute the tax-excluded price.



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Constructed Price displays the total extended price, plus applicable sales tax, plus or

minus total allocations, minus applicable MDET included amount for the invoice line meeting

the data selection criteria.

Calculated Value = Total Sales +/- In Period Allocations MDET Excluded

Scenario Multiplier displays the configured percentage, based on supply chain

scenario, used to calculate the taxable basis for the invoice line meeting the data selection

criteria.

Taxable Basis displays the total amount used as the base for the Medical Device Excise

Tax computation for the invoice line meeting the data selection criteria.


Tax Rate

Displays the configurable rate of excise tax for the invoice line meeting the data

selection criteria.

If an invoice line is not subject to MDET the tax rate will be 0.0%.

MDET displays the total Medical Device Excise Tax due for the invoice

line meeting the data selection criteria.


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Reporting

MDET Credit Invoice Line Detail

Report

MDET Credit Invoice Line Detail Report


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MDET Credit Invoice Line Detail Report Column Details


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Constructed Price displays the total extended price, plus applicable sales tax, plus or

minus total allocations, minus applicable MDET included amount for the invoice line meeting

the data selection criteria.

Calculated Value = Total Sales +/- In Period Allocations MDET Excluded


Scenario Multiplier displays the configured percentage, based on supply chain scenario,

used to calculate the taxable basis for the invoice line meeting the data selection criteria.

Taxable Basis displays the total amount used as the base for the Medical Device Excise

Tax computation for the invoice line meeting the data selection criteria.




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Constructed Price Benefit

Displays the amount by which the Constructed Price was reduced in order to calculate

the Taxable Basis for the invoice line meeting the data selection criteria.

With respect to MDET based on a constructed price, a price readjustment is allowable

only to the extent that the readjusted price is lower than the constructed sale price on

which that tax was based.

MDET displays the total Medical Device Excise Tax due for the invoice line meeting the

data selection criteria.

Received in Current Period Rebates

Displays the total of Out of Period rebate allocations paid in the current period

against prior period sales for the invoice line meeting the data selection criteria. Out of period rebate allocations originate from rebate input files. Rebate allocations

will reduce the tax basis.



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Received in Current Period Discounts

Displays the total of Out of Period discount allocations paid in the current period againstprior period sales for the invoice line meeting the data selection criteria.

Out of Period discount allocations originate from Discount adjustment input files.

Discount allocations will reduce the tax basis.

Allocations from Prior Periods

Displays the total Out of Period allocations, for the invoice line meeting the data selection

criteria, which were paid in prior periods.

This can include both Out of Period rebate and Out of Period discount allocations.

Total Allocations displays the total of all Out of Period adjustments that have been

allocated for the invoice line meeting the data selection criteria.

Net Allocations Available After Benefit displays the net amount of allocations that haveexceeded the Constructed Price Benefit for the invoice line meeting the data selection criteria.

Credit Before MDET Cap displays the MDET Credit based on the amount of allocations

that exceed the Constructed Price Benefit, without a comparison to the amount of MDET that was

paid for the invoice line meeting the data selection criteria.



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Cumulative Prior Period Credit Applied displays the cumulative amount of MDET

Credit from prior periods for the invoice line meeting the data selection criteria.

Net Credit Applied displays the total Medical Device Excise Tax credit that has been

applied to the invoice line meeting the data selection criteria.


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Reporting

Sales Invoice Line Detail Report



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Sales Invoice Line Detail Report Column Details


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Unit Price displays the price per unit for the invoice line meeting the data selection

criteria.

Quantity displays the quantity of units sold for the invoice line meeting the data selection

criteria.

Extended Price displays the extended price for the invoice line meeting the data

selection criteria.

Calculated Value = Unit Price * Quantity

Sales Tax displays the total amount of sales tax, per line item, for the invoice line

meeting the data selection criteria.




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Reporting

Data Inquiry / Information Review

Reports

Data Inquiry / Information Review Reports - Overview


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Data Information Review Reports

Enable users to perform inquiries on the master data used to calculate estimated payments and returns.

Following the Input file specifications, the following six (6) Data Inquiry/Information Review reports are available in theKPMG MDET Processing System:

Customer Data

Product Data

Invoice Data

Adjustment Data

Shipping Data Rebate Data

Each report will have the same columns/fields as described in the Input File Specifications.

Data Information Review Customer Data - Filters


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Data Information Review Reports Customer Data

Provides users with customer information that has been previously uploaded to the system and may have been used to

calculate MDET.

The user has the ability to filter the report by the following:

Customer ID users can select to display all customer IDs or enter one customer ID.

Quarter users can select to display multiple quarters.

Year users can select to display multiple years.

Customer Account Group users can select to display Retailers, End Users, or both.

Related Customer users can select to display Related customers, Unrelated customers, or both.

Default Export Customer users can select to display customers that are defaulted as export customers,

domestic customers, or both.

Default Manufacturer Customer users can select to display customers that are defaulted as manufacturer

customers, non-manufacturer customers, or both.

Data Information Review Product Data - Filters


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Data Information Review Reports Product Data

Provides users with product information that has been previously uploaded to the system and may have been used to

calculate MDET.


Product ID users can select to display all product IDs or enter one product ID.



FDA Listed users can select to display FDA Listed devices, non-FDA Listed devices, or both.

Product Types

Instrumentation Products Service Products

Freight Products

Warranty Products

Discount Products

Data Information Review Invoice Data - Filters


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Data Information Review Reports Invoice Data

Provides users with detailed invoice transaction information that has been previously uploaded to the system and may

have been used to calculate MDET.


Date Range users can select a date range to display invoice transactions, based on Invoice Date.



Invoice ID users can select to display all invoice IDs or enter one invoice ID.


Profit Center users can select to display all profit centers or enter one profit center.

Data Information Review Adjustment Data - Filters


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Data Information Review Reports Adjustment Data

Provides users with detailed adjustment allocation transaction information that has been previously uploaded to the

system and may have been used to calculate MDET.


Date Range users can select a date range to display adjustment transactions, based on:

FromAdjustmentDate for Data Identification IDs of ADJ01, ADJ02, and ADJ05

PaymentDate for Data Identification IDs of ADJ03 and ADJ04



Data ID users can select to display all Data IDs or enter one Data ID.

Adjustment ID users can select to display all adjustment IDs or enter one adjustment ID.

Data Information Review Shipping Data - Filters


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Data Information Review Reports Shipping Data

Provides users with detailed shipping allocation transaction information that has been previously uploaded to the system

and may have been used to calculate MDET.


Date Range users can select a date range to display shipping transactions, based on FromShipDate.



Shipment ID users can select to display all shipment IDs or enter one shipment ID.

Data Information Review Rebate Data - Filters


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Data Information Review Reports Rebate Data

Provides users with detailed rebate allocation transaction information that has been previously uploaded to the system

and may have been used to calculate MDET.


Date Range users can select a date range to display invoice transactions, based on PaymentDate.



Rebate ID users can select to display all rebate IDs or enter one rebate ID.


Product Specific users can select to display rebates that are product specific, not product specific, or both.


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File Status Reporting

File Status Reporting - Overview


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Enables users to view the status of files which have been submitted to the tool for processing.

These reports inform users on:

Start and finish times

Successful data loads

Data errors encountered



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MDET File Upload Status Grid - Details


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MDET File Upload Status Grid

Enables users to view status of each file uploaded in the tool, to determine which file uploads were successful and which

were unsuccessful.

If the file upload was successful, then the File Upload Detail Report will provide information on the number of

rows uploaded to the tool.

If the upload was unsuccessful, then the File Upload Detail Report will detail the data errors/warnings

encountered.

The grid displays all files associated with the entity uploaded into the tool in the last one year (365 days).

MDET File Upload Status Grid Details (cont.)


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MDET File Upload Status Grid

The grid displays the following information:

Input File Name as uploaded by the user

File Type types include:

Customer

Product Invoice

Adjustment Installation

Adjustment Insurance

Adjustment Discounts

Adjustment Quick Pay

Adjustment Other

Shipping Rebates

File Upload Date displays the date that the file was uploaded into the tool

Upload Status displays the status of the file uploaded into the tool:

Successful If the file was uploaded to the tool without any errors. Note: A successful file upload may have

warnings. Failed If data errors were encountered and file was not uploaded to the tool.

Details users can select the link to open the File Upload Detail Report for both successful and failed file

uploads (detailed next).

MDET File Upload Detail Report - Details


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The following describes what is included in the error section of the File Upload Detail Report:

Error # displays a unique and sequential number within each report.

Input File Row # displays the input file row number of the record in the input file. NOTE: This field counts the

header rows as part of the count. For example, the very first row in the file (containing for header column names)

will be #1, the next row (which contains the header information) will be #2, the following row (which contains thecolumn names for the data rows) will be #3 and the data rows start on row #4.

Error Description displays a description of the error.

Total Errors displays the total number of errors for the report.

MDET File Upload Detail Report - Details


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The following describes what is included in the warning section of the File Upload Detail Report:

Warning # displays a unique and sequential number within each report.

Input File Row # displays the input file row number of the record in the input file. NOTE: This field counts the

header rows as part of the count. For example, the very first row in the file (containing for header column names)

will be #1, the next row (which contains the header information) will be #2, the following row (which contains thecolumn names for the data rows) will be #3 and the data rows start on row #4.

Warning Description displays a description of the warning.

Total Warnings displays the total number of warnings for the report.


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Sales Tieout Reporting

Sales Tieout Reporting - Overview


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The tool will provide a sales tie-out report that will enable users to compare sales and adjustments as recorded in the

MDET Processing Tool to sales and adjustments recorded in the entitys financial reporting systems.

The report will provide the key sales figures taken from the MDET Processing Tool for trade and affiliate sales as well as

the rebates, freight and other adjustments recorded. Users will be able to filter and group the report by time periods for

easier comparison to the clients financial reporting.

The columns/fields are described in the Sales Tieout Report Specifications



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The user will have the ability to filter or display the report by:

Year

Period/Quarter

Date Range User Defined

Calendar Periods displayed by Month or Day

Operating Company Codes

Sales Tie Out Report Column Details


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Sales Tie Out Report

Time Period Section Displays the year, date, period, week and month range.

Gross Sales Trade Displays the total sales, sales tax, and discounts for each Domestic Trade, Distributor Sales, andInternational Sales.

Freight Revenue This column displays the total Freight Revenue for unrelated Domestic Trade, Distributor, andInternational customers.

Total Trade Sum of Gross Sales Trade for Domestic Trade, Distributor Sales, International Sales and Freight

Revenue.

Affiliate Sales Section This section displays the total Sales, Sales Tax, Discounts, and Freight Revenue for both Domesticand International Affiliate Sales.

Total Affiliates Sum of Domestic and International Sales details.

Net Sales Displays the total of Total Gross Trade, Product Sales, and Total Affiliates.

Rebates Freight and Other Adjustments Displays individual totals as well as a sum of all.

Net Total Net Sales after Rebates, Freight and Adjustments


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Tax/Sales Product Transfer Detail

Reports

Tax/Sales Product Transfer Detail Reports - Overview


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MDET Tax/Sales Product Transfer Detail Reports

Summary reports are generated by the system (MDET Tax Preparation Summary Report) which are used by the Client

to prepare estimated payments and quarterly excise tax returns. For each figure on the summary report, the MDET

Tax/Sales Product Transfer Detail reports will display the detail transactions used to arrive at the summary figure.

The reports will show the elements that were used to determine the MDET Tax amount and sales amounts for each

unique ProductID, BatchNumber, and SalesEntityID combination.

The tool shall provide a report that allows the user to view product transfer level details used in the calculation of taxes

and sales. The purpose to provide the user with the details used in the tax calculations at a more granular level.

Tax/Sales Product Transfer Detail Reports

Th ill h th bilit t filt di l th t b


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The user will have the ability to filter or display the report by:

Quarter

Sales Entity ID

Product Type

Transfer Type

Supply Chain Scenario

Product ID

Tax/Sales Product Trans

Documents

MDET_User Training Material - R2 v2