Split VAT payment in local currency

Split VAT payment in local currency enables separate handling of the VAT and net amounts using local currency.

Limitations

Split VAT payment functionality applies only to payment class 3 and transfer method 3= Electronic format.
Matching credit invoices in AR in 'Suppl Payment Proposal. Open' (APS130) is not supported.
AR invoices and reporting of VAT and net amounts in the AR module are not included.
Manual supplier payments in 'Suppl Payment. Enter Manual' (APS120) are not included. Only electronic payments in (APS130) are supported.
AP credit invoices are not considered and are not selected in payment proposals that use split VAT payment methods.
Corporate netting, recurring payments, and prepayments are not supported.
Trade code break level in the (APS130) payment proposal is not supported.
Reversing reversal payment vouchers in 'Voucher. Reverse' (GLS900) is not supported.
'Suppl Payment Proposal. Open' (APS630) is not supported.
Non-deductible VAT is not supported.

Basic data and settings

Set up the required basic data.

'AP Payment Method. Open' (CRS071)

You can use the functionality to split VAT payment in local currency using the 'VAT payment in local currency' parameter on the net payment method in 'AP Payment Method. Open' (CRS071). Before selecting this parameter, set 'Split payment VAT amount' to 1='Yes' or 2='Yes, automatic validation to e-register' on the payment method. You must also specify the VAT payment method and the VAT company bank account in 'Bank account. Open' (CRS692). This information is used in the VAT part payment proposal in 'Suppl Payment Proposal. Open' (APS130).

Split VAT payment in local currency process

In some countries, such as Poland, supplier invoices can include VAT in a foreign currency. When customers post these invoices, they must pay the VAT amount to the tax authorities in the local currency and the net amount to the supplier in the original invoice currency.

In 'Suppl Payment Proposal. Open' (APS130), two separate payment orders for one invoice are automatically generated: one payment order for VAT in the local currency and one payment order for the net amount in the foreign currency. The separate payments orders are generated when 'VAT payment in local currency' is selected on the AP payment method and the invoice is a domestic invoice in a foreign currency.

The net part payment is paid to the ordinary payee’s bank account, and the VAT part payment is paid to the payee’s secure VAT bank account.

'Supplier Invoice. Record' (APS100) and 'Supplier Invoice Batch. Open' (APS450)

When a supplier invoice is specified in 'Supplier Invoice. Record' (APS100) or 'Supplier Invoice Batch. Open' (APS450) and the net payment method is used, you must specify the VAT supplier bank account in local currency in 'Bank account. Open' (CRS692). You can later change the bank account in 'Accounts Payable. Change Separate Invoice' (APS201).

'Suppl Payment Proposal. Open' (APS130)

To support split VAT payments on local invoices in foreign currency, two separate payment orders are generated in the supplier payment proposal in 'Suppl Payment Proposal. Open' (APS130). Both payment orders are created for the same invoice and the same payment proposal number, but as separate payment orders.

One net part proposal, payment type 'NP-Net part', is created in the invoice currency, excluding VAT. One VAT part proposal, payment type 'VP-VAT part', is created using the VAT payment method in local currency. The total VAT amount also includes VAT on cash discounts. The total VAT amount must be converted to local currency using the invoice rate and is paid in local currency.

The net part and the VAT part are linked at the invoice level. To support this link, additional information number 476- 'Split VAT payment counter part' is added to the payment transactions.

The net part and the VAT part belong to the same supplier invoice and are therefore directly related. If either part is deleted, both the net part and the VAT part are deleted when both have status 1 in (APS130). The net part proposal and the VAT part proposal can be confirmed independently.

Net part payment proposal

The net part payment is paid in the invoice currency to the ordinary payee bank account. The payment amount can be changed, but it cannot exceed the total net amount on the invoice. When a value is changed on the net part, the VAT part is also affected. Changes to the payment date or amount on the net part directly affect the VAT part.

The panel E in 'Supplier Payment Proposal. Update Details' (APS137) shows the total net amounts.

The currency gain or loss is calculated only on the net part of the gross invoice amount because it is in foreign currency. The net cash discount amount and the withheld tax amount are included in the net part.

VAT part payment proposal

The VAT part payment is paid in local currency to the payee's secure VAT bank account. If it is VAT on a cash discount, it is included in the total VAT amount. The VAT amount must be converted to local currency using the invoice’s exchange rate. No currency deviations are created on the VAT part.

The VAT part inherits settings from the net payment method, such as the transfer method, grouped payment code, and bank confirmation. The cash discount method selected for the net part payment method in 'FAM Function. Open' (CRS405) is also used for the VAT part.

The VAT amount to pay cannot be changed. If there is no VAT or if the total VAT amount equals zero, the VAT part is still created with block code 3.

You can only display and confirm the VAT part proposal. On the panel E in 'Supplier Payment Proposal. Update Details' (APS137), you can view the total VAT amount. Withheld tax is not used on the VAT part. VAT on currency rate variances is not considered because the VAT part is in local currency.

More to consider

These settings are to consider when setting up VAT bank account handling across Accounts Payable programs and related API transactions:

'Accounts Payable. Change Separate Invoice' (APS201)
The VAT supplier bank account on the invoice can be changed in (APS201).
Reversal in 'Voucher. Reverse' (GLS900)
When a payment voucher is reversed for either the net part or the VAT part in (GLS900), both parts are reversed because they are linked.
'Accounts Payable. Display' (APS200)
The VAT supplier bank account, VAT company bank account, and VAT payment method fields are available for display in (APS200).
'Supplier Invoice. Display Separate' (APS215)
The VAT supplier bank account, VAT company bank account, and VAT payment method fields are displayed on the E panel in (APS215).
API transactions
Additional details are provided in the API metadata.
Updated APIs:
- APS201MI
  UpdInvDetails: Supports updates to the VAT supplier bank account.
- APS130MI: Retrieves the VAT supplier bank account and the VAT payment in local currency parameter.
  GetHead
  
  GetHead2
  
  GetHeadAddress
  
  GetInvLine
  
  LstInvByPayDate
  
  LstInvByPayDoc
  
  LstInvByPayee
  LstProposal
- APS450MI
  AddHead: Supports entry of the VAT supplier bank account.
  
  GetHead: Retrieves the VAT supplier bank account.
  
  UpdHead: Supports updates to the VAT supplier bank account.
- APS130MI: These API transactions are new.
  
  GetInvNETPart: Retrieves the invoice line NET part from payment proposal details.
  
  GetInvVATPart: Retrieves the invoice line VAT part from payment proposal details.