SETUP VAT

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VAT Posting Groups

In Business Central, VAT is calculated based on the VAT Business Posting Group and the VAT Product Posting group.

VAT posting groups define how VAT is calculated and posted according to:

  • Who is sold to or purchased from (customers and vendors)
  • What is sold or purchased (items and resources)

VAT Business Posting Groups

How to set up VAT business posting group

Choose the Search for Page and enter VAT Business Posting Group

 

Field Descriptions
Code Type a unique identifier for the business group
Description Type a short description
VAT Liable This will enable VAT liable status – True or False in master data.
Default VAT Registration No By selecting the assign business group, registration no. will be loaded to the master data. This option is useful for recording a transaction for those who not registered for VAT. Ex: Government Institutions which are not registered for VAT or Individual person.
VAT Registration No. Mandatory Assign True to the Boolean If VAT Registration No. need to be mandatory. This field will be validated at the Sales and Purchase documents by selecting Customer/Vendor and at the time of posting.

 

VAT Product Posting Groups

 

VAT product posting groups determine the calculation and posting of VAT according to the type of:

      • Item being purchased.
      • Item or resource being sold.
      • Costs such as item charges

How to set up VAT product posting group

Choose the Search for Page and enter VAT Product Posting Group

 

Code Type a unique identifier for the business group
Description Type a short description

VAT Posting Setup

 

Choose the Search for Page and enter VAT Posting Setup

In the VAT Posting Setup window, configure the combinations of VAT Business Posting Groups and VAT Product Posting Groups. For each combination, you should fill in a VAT %. You can set up as many combinations as needed.

For each combination in the VAT Posting Setup page, specify:

  • VAT percentage
  • VAT calculation type
  • G/L account numbers for VAT posting relating to Sales and Purchases

The VAT posting setup also includes the VAT Calculation Type field. With the VAT calculation type field, the method of calculating VAT is defined as below.

Type Descriptions
Normal VAT Use this option to calculate VAT for items sold or purchased with this combination of business posting group and product posting group code. With this option, the seller of the item calculates and withholds the VAT.
Full VAT Use this option when the amount to post with this combination of VAT business posting group and VAT product posting group consists entirely of VAT. This option is useful for recording Import VAT.

 

Assign the VAT Business Posting Group to Customer and Vendors

 

 

 

 

Open the customer/vendor and on the Invoicing Fast Tab, select the appropriate VAT Business Posting Group (A)

 

(B) From the customer/vendor card you can also control whether a customer/vendor should see Prices including or excluding VAT. If you enable the Prices Including VAT checkbox on the Invoicing FastTab, a customer/Vendor will see all item prices in the BC including tax.

(C) Based on the combination assigned in business posting group VAT Registration No. will be loaded. If VAT Registration No. is enabled, this field will be validated in Sales and Purchase related documents.

(D) Specify the value of VAT liable status in VAT Business Posting Group, by selecting the combination master card will update the same.

 

Assign the VAT Product Posting Group to Item and Resources

 

 

Open the item card of the required item/resources and on the Costs & Posting FastTab, select the appropriate VAT Product Posting Group.

 

VAT is calculated when there is a match between the VAT Business Posting Group assigned to the customer and the VAT Product Posting Group assigned to the item/resources. If there is no match, VAT will not be applied to the relevant documents.

G/L accounts in Dynamics 365 Business Central can also store a combination of VAT Business Posting Group and VAT Product Posting Group.

If there is a relevant combination set for the G/L account, VAT will be applied to the corresponding documents.

To create a VAT posting setup to handle Import VAT

 

 

Use the Import VAT feature when you need to post a document where the entire amount is VAT.

To set up codes for import VAT, follow these steps:

    1. Choose the search icon, enter VAT Product Posting Groups, and then choose the related link.
    2. On the VAT Product Posting Groups page, set up a new VAT product posting group for import VAT.
    3. Choose the icon, enter VAT Posting Setup, and then choose the related link.
    4. On the VAT Posting Setup page, create a new line, or use an existing VAT business posting groups in combination with the new VAT product posting group for import VAT.
    5. In the VAT Calculation Typefield, choose Full VAT.
    6. In the Purchase VAT Accountfield, enter the general ledger account to use for posting import VAT. All other accounts are optional.

To update the CUSDEC relation information related to Imports documents provided by the local authority (E.g.: Director General of Customs).

Follow these steps:

  1. Open the relevant vendor card and enable “CUSDEC Information”.

  1. Open the Purchase document and select the vendor (Which CUSDEC information enabled)
  1. On the CUSDEC information fields enter the data available on the CUSDEC document

CUSDEC Sample