Value added tax
Requirement
Most countries in the world have implemented VAT as the most common tax system for consumption. In general terms, VAT is due for the supply of goods and services on the date of issuance of the invoice or bill.
M3 solution
These requirements are supported:
- VAT on goods and services
- VAT on purchase of goods and services
- VAT on supplier self-billing
- VAT on payments
- VAT on deliveries
- Required VAT information on invoices
- Simplified triangulation
- Fiscal representation
- Through address and entry point in EU
- VAT handling for prompt payment discounts
- VAT in both local and foreign currencies
- VAT reporting
- VAT reconciliation
- VAT payments and refunds
The calculation, accounting, reporting, and reconciliation of value added tax is supported by generic functionality in M3. Country-specific functionality is then configured from this standard functionality, and delivered with the country version:
- VAT reports and electronic reporting
- Unpaid supplier invoices
- VAT reports by voucher number
- VAT reports by invoice number for customer and supplier invoices
You must set these VAT codes for the identification of taxes to be used for the electronic sales and purchase book. You must set at least one VAT code for these categories:
- Normal VAT
- Exempted (Exento)
- VAT deductible (IVA recuperable), 19%
- VAT on fixed assets (IVA activo fijo), 19%
- Non identified VAT (IVA uso común), 19%
- Combined VAT
- VAT with partial retention (Retención partial IVA no retenido), for example 10%+9%
- Additional taxes without credit right deduction (Impuestos adicionales o específicos sin derecho a crédito), for example 19%+20.5%
- Additional taxes with credit right deduction (Impuestos adicionales o específicos con derecho a crédito), for example 19%+20.5%
- Other taxes with credit right deduction (Otro impuesto con derecho a crédito) – one VAT code per type of tax such as wines (19%+20.5%), liquor (19%+31.5%), beers (19%+20,5%), etc.
Each VAT code, linked to its VAT rate, is allocated to a specific account for the identification of each tax purpose. See VAT periodic reporting – communication of purchase lists.
Additional retention taxes are handled using service codes with the corresponding percentage. See Supplier tax deduction or withholding tax.
Configuration guidelines
| Program ID | Program name | Description or comment |
|---|---|---|
| MNS100/G | Company. Connect Division | Specify the tax method and the RUT per division. See Tax registration number. |
|
CRS030 CRS031 |
VAT Code. Open VAT Rate. Open |
Specify the VAT rate by date, country, and area or state. |
| CRS045 | Country. Open | In the Chk dig mtd VAT field, set the validation method for the check digit of the VAT registration number to 03. |
| CRS395 | Accounting Rule. Set | Configure all VAT setups. |
| CRS620/E | Supplier. Open |
Specify the supplier's RUT. For the detailed configuration guidelines for the applicable tax numbers per supplier type, see Tax registration number. |
| CRS624/F | Supplier. Define Purchase & Financial | Set the Tax applicable field and specify the VAT code. |
| CRS630 | Accounting Identity. Open | Set the VAT account types as required. |
| CRS750/F | Settings – General Ledger | Specify this information:
|
| TXS001 | VAT Reporting. Connect MI Transactions | Specify this information:
|