About EU VAT Reporting Categories
The categories that are described in this topic are defined on
the EU VAT Reporting Categories form.
If Activate EU Reporting is selected on the General Parameters form, you can use the categories in these forms:
- Tax Codes form: You can specify a category for each tax code.
- VAT Report form: You can choose to sort the report by tax code categories, and have subtotals for the categories.
Category Descriptions
These predefined categories are included:
| Category | Description | Create offsetting tax entries? |
|---|---|---|
| Tax | Can be both sales tax and purchase tax, but only for domestic transactions. | No |
| Sales Tax | Domestic sales tax. | No |
| Purchase Tax | Domestic purchase tax. | No |
| EU Sales | EU sales tax for goods. The base amounts must also be reported in the EU Sales List Report with a blank Process Indicator. | No |
| EU Purchase | Tax must be calculated with the populated percentage for each posting. One tax account is posted in the debit and another tax account in the credit. | Yes |
| EU Triangular Sales | EU sales tax for triangular transactions, where three different EU countries are affected by one order. The base amounts must also be reported in the EU Sales List Report with a Process Indicator of 2. | No |
| Tax on Import | EU tax on a purchase from outside the EU countries. There is only an invoice from Customs with the tax, and nothing else. When you post this invoice in the application, the tax amount goes directly to the tax line and thus into the tax report. | No |
| Old Part Tax | Tax where only part of the invoice net amount is valid for the tax calculation. | No |
| Manual Tax | Same as the Tax on Import, but for a domestic purchase tax. | No |
| Reverse Charge | Tax on special domestic transactions such as import of services. The tax must be calculated with the populated percentage for each posting. One tax account is posted as a debit, and another tax account is posted as a credit. This charge is used to create offsetting entries for goods between countries, when you want to record the transaction but not make a payment. | Yes |
| EU Services | EU sales tax for services. The base amounts must also be reported in the EU Sales List Report with a Process Indicator of 1. | No |
Offsetting Tax Entries
For some categories of VAT tax, the system must create offsetting debit and credit entries.
When tax codes that are assigned these categories are used in some areas of the system, special processing occurs:
- When generating a voucher on the Generate A/P Transactions form, the system generates two distributions against the tax code at the same time, on the Taxes tab and in the aptrxd table.
- When generating a voucher in the Voucher Builder, the system generates two distributions against the tax code at the same time, in the aptrxd table.
- When automatically generating a voucher during Purchase Order Receiving, the system generates two distributions against the tax code at the same time, in the aptrxd table.
- Offsetting tax entries are triggered by using a VAT exempt tax code on the PO header and VAT rate code on lines. In this case, the offsetting entries create the values based on the lines, but then offset each other to ensure that the total VAT on the voucher is still zero.
In all of these cases, one tax distribution is calculated as (tax basis * tax rate) payable, and the other is calculated as (tax basis * tax rate) deductible. No matter what tax rate is defined, the calculated sales is zero.