VAT (Value Added Tax) is a tax borne only by the final customer, in order to prevent accumulation on goods or services that pass between business before reaching the final customer. Registered businesses must deduct the tax, which they suffer on their goods and services (input tax) from the tax which they charged to their customer (output tax), at the time this is paid to the tax authority.
In Financials a multiple VAT handling function exists that ensures that the VAT rules applicable in different countries can be catered for, including EU VAT and Trade Statistics reporting.
Note: When handling the VAT return the system can provide you with a VAT declaration report which can be created according to your country requirements. The system also supports VAT refunding on cash discount.
You are able to enter VAT on invoice level and/or G/L account level. How VAT is handled in your company is defined in the G/L control file.
You can also set up rules for automatic calculations and accounting of VAT amounts for different transactions.
You can create a catalogue where you connect one or several VAT accounts. The catalogue can then be defaulted when entering transactions on invoice or G/L level. This enables you to choose among several VAT accounts, when entering different types of transactions.
When you have defined how to handle the VAT in the G/L control file, you set up rules and define the default codes in the following order, depending on if you enter VAT on invoice level or G/L level.
| Invoice level | |
| Set up rules for a VAT handling code. | |
| Create a VAT catalogue. | |
| Connect the default VAT catalogue in the A/R control file or the A/P control file. | |
| Connect a specific VAT catalogue to a supplier/customer in the Business partner file, if applicable. | |
| G/L level | |
| Set up rules for a VAT handling code. | |
| Create a VAT catalogue. | |
| Connect the VAT catalogue to an account in the Account file. | |
Printouts
- G/L VAT journal – shows details for all VAT transactions in the G/L journal.