Value added tax

Requirement

All member states of the EU must adopt the EU directives regarding VAT into their own national legislation.

If a customer is offered a settlement discount for prompt payment, VAT is adjusted during payment processing. The invoice document must show the discount terms for prompt payment.

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

For Italy, localized VAT register printouts are available in this country version, for example, domestic sales, EU sales, domestic purchases, and EU purchases. Summary VAT registers are also available.

Configuration guidelines

Program ID Program name Description or comment
MNS100/G Company. Connect Division Specify the tax method and the VAT registration number (partita IVA) per division. For detailed configuration guidelines, see Tax registration number.
CRS030

CRS031

 VAT Code. Open

VAT Rate. Open

 Specify the VAT rate by date, country, and area or state.
CRS395 Accounting Rule. Set Configure all VAT setups.
CRS610/J Customer. Open

Set the Tax applicable field and specify the VAT code.

Specify the VAT registration number (partita IVA) of the customer.

For the detailed configuration guidelines for the applicable tax numbers per customer type, see Tax registration number.
OIS002/F Customer. Connect Addresses Optionally, in the VAT reg no field, specify the VAT registration number (partita IVA).
CRS620/E Supplier. Open

Specify the VAT registration number (partita IVA) of the supplier.

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:
VAT from date
Specify a date.
VAT chk online
Select this check box.
Accept VAT dev
Specify, for example, 0.01.
VAT date type
Specify 2-Invoice date.
VAT printout
Specify 3-VAT on inv & in AP.
MMS001/G Item. Open Set the VAT code purch and VAT code sales fields to the VAT codes for purchasing and selling.
MMS002/I Item. Connect Warehouse

To open (MMS002), select a record in (MMS001), then select Related > Item/Warehouse.

In (MMS002/I), set the VAT code purch and VAT code sales fields to the VAT codes for purchasing and selling.
TXS020 VAT Exception. Open

In the Text/VAT cd field, specify a type of VAT exception:

1-VAT exemption text

2-VAT code replacement for external sales

3-VAT code replacement for purchases

4-VAT code replacement for internal sales

5-VAT exemption agreement for sales

6-VAT exemption agreement - Issued

TXS030 Fiscal Representation. Open Complete the fields if relevant.