Exact Globe

Release 390: Non-deductible VAT Supported in Multiple Tax Module

Introduction

The non-deductible VAT functionality in the purchase journal is implemented in Exact Globe within the standard functionality of VAT. Besides the VAT functionalities, the multiple taxes solution is also available for the Hungarian, Spanish, French, German, Czech Republic, Slovakian, Italian, Polish, Belgian, British, Swiss, Middle East, Chinese, Thai, Austrian, Moroccan, Irish, Malaysian, Luxemburg, Swedish, Danish, and International legislations. This solution enables users to make accruals for the different types of taxes that are supported. However, the non-deductable VAT functionality was not supported in the past for multiple taxes. 

Enhancements are implemented to support the non-deductable VAT for multiple taxes but are only applicable to the first tax code in the purchase journal entry. This ensures that the legal obligations of non-deductible VAT are met.

Menu path

• System/General/Settings/General ledger settings
• System/General/Countries/VAT codes
• Finance/General ledger/Chart of G/L's
• Finance/Entries/Purchase

What has been changed

The non-deductible VAT functionality is now supported in release 390 for multiple taxes with the following conditions:

• It is applicable when the Use tax module and Non-deductible VAT check boxes under the VAT section are selected in General ledger settings.
• Users are required to define a special VAT code "N" with 0%.
• Users are required to define values for the non-deductible VAT percentage and non-deductible VAT account in the general ledger (G/L) account or VAT code maintenance (the values defined in the G/L account take precedence when both the G/L account and VAT code are used in the entry).
• Only support for the first tax code in the purchase journal entry.
  Note: The non-deductible VAT is not supported for tax codes "2" to "5". The normal tax line will be generated although the non-deductible VAT percentage and non-deductible VAT account are defined.
• Same functionality is applied when creating purchase invoices from the Invoices to be received (ITR) screen and also when creating recurring entries in the purchase journal.

Note 1: The VAT (Tax) amount becomes lesser due to the existing non-deductible VAT (Tax) amount. This will affect other areas like the tax creditor card, invoice list, VAT overview, and VAT return.

Note 2: The current structure of XML only supports the first tax code in multiple taxes. Hence, import or export can be done but is only limited to the first tax code in the purchase journal entry.

For more details of the functionality and financial entries presented in purchase journal for various legislations, refer to Details of Non-deductible VAT Functionality in Multiple Tax Module.

Related document

·         Non-deductible VAT