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Batch 350: VAT official exchange rates


Background

In most countries the government fixes periodical exchange rates, for the calculation of VAT, on a daily, weekly or monthly basis. This applies to the VAT for all transactions where the invoice's currency is a foreign currency. The use of this Government VAT rate is a legal requirement. The exchange rates for VAT used by the companies are usually different from the ones given by the Government.  

However in the previous release of Exact Globe2003, it was only possible to define one exchange rate per currency. Internationally operating companies often define this as the "corporate" exchange rate. The head offices of these organizations often require their subsidiaries to use a fixed set of exchange rates to avoid strange situations related to inter company charges and consolidation.

Therefore revaluation of VAT which is based on the official VAT exchange rates is now implemented for the following legislations:

  • Germany (601)
  • Romania (607)
  • Czech Republic (606)
  • UK (602)
  • Slovak (636)


 

What has been changed

 Revaluation of VAT is done per currency, per VAT code, per GL and per Return period. For each group of currencies per VAT code, the existing exchange rates is compared to the new exchange rates as defined in the exchange rate table.

In this implementation, the system revaluates VAT using Official VAT exrate from the last record in the exchange rates table under menu path [System/Countries/Exchange rates]. 

All exchange differences that are calculated will be summed up and a revaluation transaction denominated in default currency is created. The corresponding term is also created per currency per VAT code. Existing VAT terms would still remain untouched.

This process can only be done at the same time as the processing of the VAT final return. This is to ensure that the VAT revaluation is only done once and it is final. This revaluation is created in a separate menu path so that different users' right can be assigned.

In Globe2003, a new tab is added in menu path [System/ General/ Countries/Exchange rates] Maintain tab. This function also allows users to maintain the VAT exchange rates per currency.

Exchange rates table:




Please note that it is necessary to first link VAT boxes to a VAT code in menu path [System/ General/ Countries/ Tax code], either click new or open an existing VAT code, and then click on the VAT Box tab as shown below. (This is existing functionality).

Link VAT boxes to VAT code:


After the above steps are done, users can launch the VAT revaluation proposal.


VAT revaluation proposal:

This is a new menu path under [Finance/VAT/Statistics/VAT revaluation proposal].



When this function is started the  following screen will be shown.




In this screen, users can only view lines which have been assigned to VAT terms. This is done in menu path [Finance/ VAT/ Statistic/ Invoice List or VAT overview].

The Currency field allows users to select which currency to view.

Under this screen, user are able to view the VAT basis, the VAT amount, the currency, the VAT rate, the Amount(denoted in default currency), the rate(current), the Amount(revalued) and the revaluation(proposal).

Note the new [fields] is displayed based on the following formula :

[Amount (Revalued)] = Amount x [Rate (Current)]
[Revaluation (Proposal)] = [Amount (Revalued)] minus(-) [Amount (Default currency)]


Note: The VAT exchange rate used is the latest VAT exchange rate available in the exchange rate table.


Explanations of some buttons that are used :

Refresh: Please note that if there is no VAT exchange rate defined, users will get a message "No data found" when the refresh button is clicked.

Maintain: Here users are allowed to call the VAT exchange rate Maintain table as explained earlier.

Export: Information on this VAT revaluation proposal screen can be exported to Microsoft Excel.

VAT Return: This button will launch the following screen to print trial or final VAT return.



When the start button is clicked, users will get a pop-up message on whether to perform VAT revaluation as below:




There are 4 scenario in this revaluation process:

  1. If users click on "Yes" and VAT return type selected earlier is "Final", Exact Globe 2003 will revalue the VAT amount based on the rate of the assigned period and upon final print of the VAT report, financial entries will be generated. Exchange differences will be posted using the revaluation GL account defined under [Setting/General/Countries/Currencies] General Ledger tab, revaluation section.

  2. If revaluation is selected in "Trial" mode, system will only display the calculated amount in the [VAT revaluation proposal] screen but no financial entry will be created.

  3. No revaluation will be performed if users click on the "No" button.

  4. If users select the  "Yes" button but NO VAT exchange rate was pre-defined, users will then get the following pop-up message and NO revalaution of VAT will be performed.

VAT overview:

New fields: Currency, exchange rate and VAT (Revalued) are added to menu path [Finance/VAT/Statistics/VAT overview] to provide users with comprehensive information.




 

     
 Main Category: Support Product Know How  Document Type: Release notes detail
 Category: Release Notes  Security  level: All - 0
 Sub category: Details  Document ID: 08.459.251
 Assortment: Exact Globe  Date: 10-05-2017
 Release:  Attachment:
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