Split Payment VAT Amount
When AP payments are done, the total VAT amount and net amount must be sent to the bank. The bank creates new bank accounts for VAT payments: VAT account and Commercial account.
When paying an invoice in AP (full or partial), the VAT amount and net amount must be reported in the FBM message to the bank.
Poland and other countries are proceeding towards an anti-VAT fraud split payment regime.
The scheme involves customers paying the VAT element of any B2B supply directly into a supplier secure VAT bank account. This account is then directly accessible to the tax authorities for settlement of the VAT liability, and reconciliation to the regular VAT return. This is done in standard M3.
Manage Split Payment VAT Amount
Split VAT payments functionality is selected by parameter 'Split Payment VAT Amount' in 'AP Payment Method. Open' (CRS071). This parameter indicates if the total VAT amount on an invoice shall be split and reported to the bank when the payment of an invoice is done. It can only be used for payment methods with payment class 3-Bank transfer, and transfer method 3-Electronic payment.
If you select alternative 1-Yes and 2-Yes, Automatic validation to E-Register, the total VAT amount and the net amount per invoice are reported to the bank when paying the invoice electronically in (APS130). In addition, alternative 2 is used to run validation to E-Register automatically after creation of supplier payment proposal, which is available for country versions Poland and Slovakia only.
The bank adds the amounts to special VAT accounts and commercial accounts, and this is managed entirely by the banks.
It is the total VAT amount, irrespective of how many VAT codes are used, or what the VAT method is.
When doing partial payments, the VAT amounts are calculated pro rata. The last partial payment must take any small differences, which can occur due to the pro rata calculations, so that the reported VAT amount and the total VAT amount on the invoice match.
VAT on cash discount is also considered if 'VAT method - cash discount' has alternatives 2 or 3 selected in the 'FAM Function. Open Details' (CRS405/CRS406).
The fields for VAT amount and net amount per invoice can also be used in (CRS485).
When the parameter 'Split Payment VAT Amount' is selected on the payment method, the payment method on the invoices cannot be changed in 'Supplier Payment Proposal. Open' (APS130) and, if partially paid, not in 'Accounts Payable. Change Separate Invoice' (APS201).
For payment messages created using Financial Business Messages (FBM), the usage of the fields depends on the messages, and is described in the documentation for the message.
The VAT amount and net amount are calculated, saved, and reported to the bank when doing payments (full or partial) in 'Supplier Payment Proposal. Open' (APS130).
When payments are made in AP, the VAT amount is automatically split when:
- New parameter 'Split Payment VAT Amount' is selected in 'AP Payment Method. Open' (CRS071).
- If VAT is on the invoice (VAT transactions in FGLEDG).
- VAT account type (AT04) = 1 and 2 in 'Accounting Identity. Open' (CRS630).
Only one VAT amount per invoice is created irrespective of how many VAT codes are used on the invoice.
The two fields for VAT amount and net amount can be retrieved in API APS130MI (Supplier Payment Interface) and in 'Manage Fields in MI Strings. Open' (CRS485).
Total VAT Amount Reported
This field indicates the total VAT amount that is reported to the bank per invoice. It is the total VAT amount, irrespective of how many VAT codes are used, and it cannot be changed. The total VAT amount is withdrawn with the VAT on the cash discount, if any.
Net Amount Reported
This field indicates the net amount that is reported to the bank per invoice. It is the invoice amount withdrawn with the reported VAT amount, cash discount, and withheld tax.
Functional Limitations
- Match credit invoices AR in (APS130) cannot be used
- Payment methods with Payment Class=3 and Transfer Method 3= Electronic format only
- Only invoices with VAT (VAT transactions in FGLED)
- VAT and net amounts are per invoice
- Not included - AR invoices and reporting of VAT and net amount in the AR module. This development is only done in AP
- Manual supplier payments (APS120) are not included. Only electronic payments done in (APS130)
- AP credit invoices are not considered and are not selected in payment proposals together with split VAT payment methods.