This document explains how you select and review transactions in a VAT run, correcting any transactions with a variance between the calculated VAT and the recorded VAT online in a separate online adjustment table.
The selection for the VAT run can be made using a user-defined VAT report template. The VAT run can be performed for internal simulation, reconciliation or analysis purposes, or for reporting VAT to the tax authorities.
Use these settings when you want to carry out one of the following:
For more details, see Print VAT Report.
For more details, see Update General Ledger with Declared VAT.
Select one of the following alternatives:
To transfer the VAT transactions from the VAT suspense account or accounts to a regular VAT account, start 'VAT on Payment. Create Voucher' (TXS115).
This transfer must be done since the VAT suspense accounts are not included in the reporting. The transfer is performed on a periodic basis and once per reporting period in order to generate correct VAT reporting. Note that a preliminary journal can be printed using F15 on the F panel in order to preview the transactions that will be transferred.
Enter the end VAT date up to which transactions are to be included and a range of VAT suspense accounts. Press Enter and continue with Select VAT Transactions for VAT Run.
M3 searches for all paid or partially paid invoices and reverses the corresponding VAT transactions on the suspense account. The transactions are then transferred to a regular VAT account. The transfer is based on the accounting event of each original transaction. Example: If the payment refers to a manually entered supplier invoice, the accounting rule used will be AP10–211, where accounting event AP10 (manually entry of supplier invoices) was used when recording the invoice and accounting type 211 represents VAT receivable.
Start 'VAT Run. Open' (TXS100/B).
Enter an ID consisting of up to ten alphanumeric characters for the VAT run. Click New.
On the E panel, enter a report description (mandatory).
To limit the scope of the VAT report geographically, enter the base country of the company, the country where the VAT transactions originated (mandatory). When applicable, also enter a range of from/to countries. That is, countries to which customer deliveries have been made or countries from which supplier goods have been received.
Enter the To VAT date. That is, the date up to which VAT transactions should be selected.
For VAT reports to be sent to the tax authorities, the VAT date proposed is the same as the last VAT run date displayed in 'Settings – General Ledger' (CRS750/F); if you select another later date there might be a gap between the current and the previous VAT report. For simulation and analysis purposes, however, it can be useful to select another date.
If the report content is to be defined by the user in the form of a VAT report template, enter the ID of such a template as well. Press Enter to create a VAT run proposal.
Review and Correct Transactions Online
In (TXS100/B), select option 15='Create online adjustment' for the VAT run.
On the H panel, where the selection used when creating the VAT run is proposed, you can define a further selection of the transactions selected based on the following values: To VAT date, ranges of VAT codes and voucher numbers, the difference between calculated and the recorded VAT expressed as a percentage or as an amount, the inclusion of VAT payable or VAT receivable transactions or both (mandatory), and the inclusion or exclusion of transactions already VAT reported.
You can select to include only transactions that are or are not VAT reported, or both. In periodic VAT reporting, only new VAT transactions are included. However, if the company wants to create a VAT report for the entire year, for example, they would want to include VAT transactions already reported.
If you do not enter a difference, all transactions, with or without such a difference, will be displayed in the online adjustment table.
Press Enter to create a work table with transactions that both match your selection in the background.
In (TXS100/B), select option 16='Work with online adjustment' for the VAT run to display the transactions in 'Online VAT Adjustment. Open' (TXS120).
The sub-file displays transaction and VAT details for each transaction. Standard values are:
Select option 7='Change VAT info' for a transaction to display the accounting lines in 'Voucher. Display' (GLS200/B).
The view selected determines which values are displayed in the sub-file. See the Before Starting section.
In (GLS200/B), select option 7='Change VAT info' for the accounting line (a VAT transaction or a transaction on which the VAT is based) to correct.
You can change values for all revenue and expense transactions, that is, all transactions recorded on an account with a VAT account type higher than 2. You cannot change transactions that already have been used as a base for a VAT declaration voucher.
If applicable, change the service code in (GLS200/F
In (GLS200/G), change any of the following values: VAT code, VAT rates 1 and 2, VAT account type, base country and from/to country, VAT date and VAT registration number. Press Enter.
If you change the VAT code, the VAT rate and VAT amount is updated accordingly. If you remove the VAT registration number, the 'VAT registration number existed' check box is automatically deselected.
Press F3 to return to (TXS120) and repeat the procedure for any other transactions to correct.
In each business transaction involving goods or services subject to VAT, M3 Business Engine stores a set of VAT values for each accounting line in every voucher with a VAT account, apart from the recorded VAT itself. The table below describes these values.
|Tax code (VTCD)||The tax code based on which the VAT amount was recorded.|
|VAT account type (AT04)||The type of VAT account – such as a VAT payable or a VAT receivable account – as defined in 'Accounting Identity' (CRS630/E). For details, see Configuring M3 Business Engine for VAT Management.|
|VAT rate 1 (VTP1)||The VAT rate applied to calculate VAT amount 1. See the following section.|
|VAT rate 2 (VTP2)||The VAT rate applied to calculate VAT amount 2 when chain VAT (combined VAT) is selected as the VAT method for the tax code.|
|Calculated VAT amount 1 (EGCVT1)||
Whenever M3 Business Engine identifies a transaction as subject to VAT, it also stores a calculated VAT amount in the accounting line for the actual, recorded VAT amount. Normally, both amounts are the same. Comparing the calculated and the recorded VAT amounts per transactions helps identifying any potential errors during the reconciliation for the VAT declaration. Read more in Reconciling and Declaring VAT.
(GLS211/G) has two fields for calculated VAT. Two VAT amounts are calculated in the following scenarios:
1) The company division has purchased goods or services from another EU member state and consequently records EU VAT. The first field, 'Calculated VAT amount 1' (field ID CVT1), stores the calculated VAT receivable amount and the second field, 'Calculated VAT amount 2' (field ID CVT2), stores the calculated VAT payable amount, that is, the negative offsetting, attributable VAT).
2) Chain VAT is the selected VAT method of the tax code applied. This means that two VAT rates are used. Two calculations are made. The value in the 'Calculated VAT amount 1' field is based on the VAT base amount, whereas the value in the 'Calculated VAT amount2' field is based on the sum of the VAT base amount and the first VAT calculation.
|Calculated VAT amount 2 (EGCVT2)||See the description of field 'Calculated VAT amount 1'.|
|Base country (BSCD)||See section How M3 Business Engine Identifies Countries Involved.|
|From/To country (TFCD)||See section How M3 Business Engine Identifies Countries Involved.|
|VAT date (VATD)||Indicates the VAT date, which is either the accounting date or the invoice date or (for purchases only) the delivery date, depending on the alternative selected in 'Settings – General Ledger' (CRS750/F). You select transactions for VAT declarations based on the VAT date in (TXS100/E).|
|VAT reported (VATR)||Indicates whether the transaction has been included in a confirmed VAT declaration in (TXS100).|
|VAT registration number existed (VRNE)||Indicates whether a VAT registration number was found for the customer in 'Customer. Open' (CRS620/E).|
|VAT registration number (VRNO)||Indicates the VAT registration number of the customer.|