Set up rules for VAT on invoice level

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Rules for VAT calculations and accounting must be set up if your company enters VAT on invoice level.

  1. Select the Work with VAT handling codes menu item.
  2. On the main panel, click Add to create a new record.
  3. You access the detail panel. On this panel you set up the rules for the automatic calculation and accounting for the VAT amounts. Here, the VAT is calculated on net amount. Complete following fields:
  4. VAT handling code
    Percentage code
    Only shown if DC1 Distribution is installed and activated. Enter a code, from Work with percentages, that represents the VAT percentage. Tip: Click Maintain percentage to set up a new percentage.

    Input fields

    Base amount (AAA)
    Represents the base amount and is used for calculations.
    VAT amount (BBB)
    Represents the VAT amount.
    Inp cde
    This code decides whether or not the base amount and VAT amount of transactions must be entered.
    You have three options; NOT ALLOWED, OPTIONAL or MANDATORY.
    Note: You cannot refer a VAT or base amount to a calculation if it is NOT ALLOWED or OPTIONAL.
    Enter a formula that defines the relationship between the base amount and the VAT amount. If there is a code representing a % this is retrieved from the Percentage table.
    Note: This percentage is not connected to your entry in Percentage code above.
    Field 1-5
    These fields allow you to set up various formulas which can be used for calculating different scenarios.
    Invoice tot. control
    Mandatory entry when you enter VAT on invoice level. Enter the code representing the amount that is to be compared to the total transaction amount for a document in the manual transaction entry routines.
    If you want to disregard the relationship defined by the VAT handling code you can use an override code to do this.
    Enter the override code for this VAT handling code. The following codes are valid:
    Code Description
    0 The VAT amount and the Invoice total control will not be overridden.
    1 The VAT amount will be overridden and the Invoice total control will not be overridden.
    2 The VAT amount will not be overridden and the Invoice total control will be overridden.
    3 Both the VAT amount and the Invoice total control will be overridden.

    Note: When you override the Invoice total control you must ensure that all used VAT handling codes have override codes 2 or 3. This will allow you to override the error message.


    In these fields you enter the output transactions that are created from the formulas in the fields above.

    Enter the accounting information for the VAT amount in following fields:

    Pseudo d
    Account for debit invoices.
    Pseudo c
    Account for credit invoice.
    Note: The other two pseudo fields are used for VAT refunding on cash discount. You can complete the fields with dots (…….) if the original VAT accounts should be used. If you then use the cash discount with this VAT handling code, the VAT part for cash discount will be posted on the same VAT account, but with opposite sign.
    Tr am
    Enter the reference for the VAT amount.

    Click Next.

    Tip: The system provides you with a function where you can simulate a transaction and see if you receive the correct calculation. This can be very useful if you have complicated calculations. You access the simulation panel through the Simulate VAT handling menu item.

  5. You access the second detail panel. On this panel you determine if the amounts should be included in the EU VAT sales list. You also control whether amounts registered on this VAT handling code are to be included in the cash discount’s base amount and/or turnover amounts.
  6. Set the fields that you want to affect to YES and click OK to update.

    Note: the Reference amount field on the previous panel must be completed if you want to receive a cash discount base amount or turnover amount with or without VAT included. Exit the routine.

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