VAT Correction, Portugal and Belgium 

Use

This procedure provides a simple and accurate way to perform VAT corrections for A/R and A/P credit memos when they are required.

Prerequisites

The VAT corrections method is based on the tax groups definition, therefore, go to Administration ® Setup ® Financials ® Tax ® Define Tax Groups.

In the Tax Groups – Setup window, add new tax groups that will be specified and used as the correction tax codes, make sure to choose for the correction tax groups accounts which will be used only for this purpose.

Now, specify for each relevant tax code the proper correction tax group.

Procedure

When you need to correct VAT for A/R or A/P invoice, follow these steps:

• Make sure that the tax group involved in the to be corrected invoice has a correction tax code defined (check in the define tax groups window). If not, define a correction tax code as explained above.
• Open an A/P or A/R credit memo (depend on the invoice type), and choose the Invoice button to open the choose from list window, which displays the available invoices.
• Choose the invoice which should be corrected, and copy it to the credit memo.
• The tax code appears in the drown rows is the correction tax code that defined for the original tax code in the to be corrected invoice. Change this tax code if required.
• Add the credit memo.

Result

After the credit memo is added, the tax transaction is posted to the account defined for the correction tax group.