Step 3. Setting up VAT
General VAT Settings
To set up VAT in the system:
- Go to Master data and settings > VAT accounting, import and export.
- Select the VAT accounting checkbox.
- Click VAT rates and click Create.
- Specify the Description, Rate, Country, and effective dates.
- If the rate is main and is used by default, select the Main checkbox.
- Add the required Transaction taxation types:
- Sale is subject to VAT
- Sale is not subject to VAT
- Sale for export (available if the Sales for export checkbox is selected).
7. To enable export type, select the Sales for export checkbox.
8. If you buy goods from abroad, select the Import purchasing checkbox. This enables customs declaration for import in the system.
9. Select the Customs declaration section checkbox if you want a customs declaration to have several sections to group goods by the same procedure for calculating customs payments. For example, goods with the same VAT rate, duty rate, and country of origin will be in one group.
10. Select the Reverse VAT charge checkbox to accrue reverse VAT when purchasing goods, services, and works.
8. If you buy goods from abroad, select the Import purchasing checkbox. This enables customs declaration for import in the system.
9. Select the Customs declaration section checkbox if you want a customs declaration to have several sections to group goods by the same procedure for calculating customs payments. For example, goods with the same VAT rate, duty rate, and country of origin will be in one group.
10. Select the Reverse VAT charge checkbox to accrue reverse VAT when purchasing goods, services, and works.
Company VAT Settings
To specify that you company uses VAT:
- Go to Master data and settings and select Companies.
- Open the required company.
- Click the Accounting policy tab and under VAT accounting settings, click Change.
- Select the VAT payer checkbox.
- To accrue VAT by advance payments, select the Accrue VAT by advance payments checkbox and select that you are going to create advance VAT invoices for payments if they are:
- not set-off during the day
- not set-off during five days
- not set-off during the month
- not set-off during the quarter
6. If you want to select an activity the purchase is done for in purchase documents, select the Separate VAT accounting at purchase checkbox. When you purchase something for an activity that is not subject to VAT, the tax will be included in the cost of goods, works, or services.
7. If the Separate VAT accounting at purchase checkbox is selected, specify how you are going to allocate VAT for tax-free operations:
8. Select Month or Quarter in the Frequency field.
9. Select the allocation Base: Last year revenue, Current year revenue, or Current month (quarter) revenue.
10. To see charged VAT in VAT-free purchase transactions, select the Generate VAT charged when including in cost checkbox. In this case, when you create a Vendor invoice with the VAT free activity type, VAT is included in the cost of products bought, but you will still see this VAT in reports (although will not be able to submit it to the government as it is already allocated to costs). If the checkbox is cleared, the system will not store information on VAT charged for VAT-free purchase transactions, and you will not see this info in VAT reports.
11. Click Save and close.
7. If the Separate VAT accounting at purchase checkbox is selected, specify how you are going to allocate VAT for tax-free operations:
8. Select Month or Quarter in the Frequency field.
9. Select the allocation Base: Last year revenue, Current year revenue, or Current month (quarter) revenue.
10. To see charged VAT in VAT-free purchase transactions, select the Generate VAT charged when including in cost checkbox. In this case, when you create a Vendor invoice with the VAT free activity type, VAT is included in the cost of products bought, but you will still see this VAT in reports (although will not be able to submit it to the government as it is already allocated to costs). If the checkbox is cleared, the system will not store information on VAT charged for VAT-free purchase transactions, and you will not see this info in VAT reports.
11. Click Save and close.
Creating Tax Invoices
To create advance VAT invoices for customers in the system:
- Navigate to Profitability & cost > Prepayments from customer.
- Set the Period, Company, and filter the advance payment by the required value.
- Select the required based document and click Generate tax invoices.
- Fill the required data and click Save and close.
To create advance VAT invoices from vendors in the system:
- Navigate to Profitability & cost > Prepayment to vendor.
- Set the Period, Company, Vendor, and Status.
- Select the required based document and click Register tax invoice.
- Fill the required data and click Save and close.
There are no VAT invoices except for advance invoices in the system. VAT is registered by usual invoices in the VAT register records.
Tax Reports
You can access the list of VAT reports in Profitability & cost > Profitability & cost reports > VAT.
The following VAT reports are available for you in the system:
- Analysis of VAT accruals form advances payments (received). The report allows you to analyze VAT accruals from prepayments from customer broken down by counterparties and AR/AP transactions.
- Statement on VAT charged by business units.
- VAT accounting analysis on prepayments from customer settlement. The report allows you to analyze VAT accounting by prepayments from customers with a breakdown by counterparties and AR/AP transactions.
- VAT accounting analysis on prepayments to vendor settlement. The report allows you to analyze VAT accounting by received prepayments with a breakdown by counterparties and AR/AP transactions.
- VAT turnovers. The report allows you to analyze input and output VAT turnovers for the period.
