Acquisition Tax 

In some countries, deliveries to certain companies abroad can be tax-exempt, such as in the case of goods exported within the EU. The vendor does not charge any tax in these cases, although the invoice will record the fact that no tax was charged on the transaction.

Acquisition tax must be displayed on the balance sheet of the company that acquired the object, but can be posted as input tax. It follows that by deducting this amount as input tax, the company effectively avoids paying the acquisition tax. The tax amount is posted to the tax account as both a payable and a receivable when the incoming invoice is posted.

The tax amounts are calculated from the invoice amount (base amount), the percentage rates being country-specific. You determine them when defining your tax codes.

In contrast to acquisition tax, the offsetting entry for the acquisition tax is posted to the other side of the account (by defining a +/- sign change for the offsetting entry). See also Example: Posting Acquisition Tax.

As a result of these two postings, a tax-exempt business transaction is created. The tax amount must, however, be reported to the tax authorities.