VAT Calculation, Europe 

Use

The following procedure provides a working method, by which the VAT is automatically calculated in manual journal entries (including those created through recurring postings, postings templates and journal vouchers).

Prerequisites

The following preliminary definitions should be made in order to have the VAT calculated automatically.

• Go to: Financials Module ® Chart of Accounts choose the button Account Details to open the G/L Account Details window, and define there the relevant default tax group for each account and whether to allow changing the chosen vat group in transactions or not.
• Go to: Administration Module ® System Initialization ® Document Settings ® Per Document Tab . Choose from the drop down menu the option Journal Entry and define whether to use automatic vat calculation or not.
• In order to create a one time journal entry without having the vat calculated automatically, go to the Form Settings – Journal Entry window and clear the box Auto VAT.

Procedure

When the user creates a manual journal entry or a service document the following happens:

1. Once the user chooses a “base” account, the default vat group defined for this account appears in the field Tax Group in journal entry, and Tax Code in service document.
2. In addition, in manual journal entry a row for the account defined as a tax account for the chosen tax group automatically appears in gray. This tax account row is not editable and is being filled automatically.
3. If the user allowed changing VAT group, these fields (Vat Group and Vat Code) are activated, and a different VAT Group can be chosen.
4. Once a debit or credit amount is entered for the account chosen, the tax amount is calculated according the vat amount and entered to the Tax Amount field. To avoid calculating the credit or debit amount in advance, the user can enter the total amount including vat to the Gross Value field and SAP Business One will automatically calculate the debit/credit amount and the vat amount. Note, that the gross value can be entered in local currency only.
5. Complete the journal entry, and add it.
6. The behavior described above for manual journal entries is relevant for journal entries created through posting templates, recurring postings and journal vouchers as well.

 

·         SAP Business One knows how the calculate the VAT according the sign at the amount in the transaction and not only according its side. Therefore vat amount in the debit side with negative sign is considered as vat amount in the credit side.

·         When creating an invoice for service and the selected account has no VAT group defined, SAP Business One use the default VAT group defined in Administration ® Setup ® Financials ® G/L Account Determination