Introduction

You can create value-added tax (VAT) codes to be used by your company.

Menu path

Go to Financial/Setup/VAT/Tax codes. Then, click New.

Roles & rights

To create VAT codes, function right 422 – Maintain VAT codes is required. Users with the General Manager and Controller roles have this function right.

For more details on what you can do with function rights or levels, go to System/Setup/Security/Function rights, select the required module, and then click on the relevant ID. To find out the functions you can perform with a particular role, go to System/Setup/Security/Roles, type in the description, click Refresh and then click the required link under the Role column. 

Button

Save

Click this to save the VAT code.

Save + New

Click this to save the VAT code and create another VAT code.

Close

Click this to exit.

Description

Division

The division displayed is the division selected when displaying VAT codes. If no division is selected, the default division is displayed. For more information, see Displaying VAT Codes.

Code

Type a unique VAT code for the new VAT. You cannot edit this code the next time you want to maintain the VAT. This field is mandatory.

Description

Type the description of the VAT you want to create.

Transaction type

Select the transaction type of the VAT. You can choose Purchase, Sales, or Both if you want to use the VAT for both purchase and sales transactions.

Percentage

Type the percentage of the VAT you want to create. For example, 19.00 for a VAT of 19%.

Frequency

Select the frequency of the VAT payment. You can choose from Monthly, Quarterly, or Yearly.

VAT type

Select the VAT type. You can choose from Excluding, Including, or N/A (not applicable). If you select Excluding and the VAT is 19% and the invoice amount is EUR 100, the amount of tax charged will be 19% of EUR 100. Hence, the tax amount will be EUR 19. If you use the VAT type Including and the VAT is 19% while the invoice amount is EUR 100, the 19% portion of the tax amount is already included in the invoice amount. Hence, the tax amount is EUR 16 (19% x 100 / 119%).

Note: VAT type is disabled if the VAT percentage is 0.  

VAT charged

If you have selected Purchase at Transaction type, you can select the VAT charged check box to indicate that the VAT is charged for purchase transactions.

VAT to pay account

Click the icon to select the general ledger account to be used for recording the VAT payable.

Note: This is enabled and is mandatory if Both or Sales is selected at Transaction type, or if Purchase is selected at Transaction type and VAT charged selected.

VAT to claim account

Click the icon to select the general ledger account to be used for recording the VAT to claim.

Note: This is enabled and is mandatory if Both or Purchase is selected at Transaction type.

Creditor

Click the icon to select the creditor account which handles the VAT. Usually, this is the tax authority. This field is mandatory.

Related document