Setting Up VAT

Apprise includes functionality to record VAT on an accrual basis so that you can record input VAT paid to your suppliers and output VAT paid by your customers. The system provides flexibility so you can adhere to the tax regulations of each country in which your company operates.

Before you can track VAT in Apprise, you first set up the following VAT-specific data:

• VAT IDs - VAT IDs identify your company to taxing authorities.

• VAT classes - VAT classes define the tax rates for the products you buy and sell.

• VAT exempt reasons - VAT exempt reasons are used to describe the reason why an order is exempt from VAT.

• VAT groups (optional) - VAT groups are groups of customers with VAT rates that are not the standard rate for a country.

• VAT statuses (optional) - VAT statuses define the status of accounts payable vouchers for countries that require approval for VAT invoices.

• VAT rules (optional) - VAT rules define exceptions to standard VAT rates for combinations of VAT IDs, VAT groups, and VAT classes.

To set up VAT in Apprise:

1. In Account Maintenance, set up the following general ledger accounts to track VAT amounts:

   • Input VAT Clearing

   • Input VAT

   • Input VAT Write-off

   • Input VAT Pending

   • Output VAT

   • Output VAT Variance

For information on the purpose of these accounts, see VAT Account Resolution.

2. In Tax Control Maintenance, enable VAT visibility in Apprise.

   1. Click the Update button in the ribbon.

   2. Click the Lookup button for the VAT Display Level field, and select Show.

   3. Click the OK button in the ribbon. The settings are updated.

3. In VAT ID Maintenance, create VAT IDs for your company.

4. In Account Element Maintenance, enter VAT IDs to associate with company account elements.

5. In VAT Class Maintenance, create VAT classes to set up the tax rates for products and additional charges. You can also import VAT classes in VAT Class Import.

6. In Country Maintenance, set up VAT options for each country that uses VAT.

   1. Select a country, and click the Update button in the ribbon.

   2. Select the Use VAT check box.

   3. Enter your company's VAT ID for the country in the VAT ID field.

   4. If VAT invoices for the country expire after a number of days without approval, enter the number of days in the VAT Due Days field.

   5. Enter the supplier code or name of the default VAT supplier to which you will pay VAT on purchase orders for the country in the Default VAT Supplier or Name field.

   6. Enter the default output VAT class for the country in the Default Output VAT Class field.

   7. Enter the default input VAT class for the country in the Default Input VAT Class field.

   8. If the country limits monetary amounts of invoices, enter the limit in the country's default currency in the Invoice Amount Limit field.

   9. Click the Accounts tab.

   10. Enter all or part of VAT general ledger accounts that you want to resolve from the country.

   11. Click the OK button in the ribbon. The country is updated.

Note The country for customer and supplier addresses determines if VAT is calculated for an order.

7. In VAT Exempt Reason Maintenance, create VAT exempt reason codes to track the reasons orders are exempt from VAT.

8. In VAT Status Maintenance, create VAT statuses.

9. If your company uses sizes for products, set up VAT options for sizes on the VAT tab in Size Maintenance.

10. In Product Maintenance, set up VAT options for products and assign VAT classes to products for specific countries.

    1. Select a product, and click the Update button in the ribbon.

    2. Click the Selling tab.

    3. Select the Price Includes VAT radio button if you want the product prices to include VAT.

    4. Click the Accounts tab.

    5. Enter all or part of VAT general ledger accounts that you want to resolve from the product.

    6. Click the VAT tab.

    7. For each country for which VAT is assessed for the product, enter the country code in the Country field, enter the VAT class in the VAT Class Code field, and click the Add button. If the product uses a country's default VAT input/output VAT class, you can skip this substep for the country.

    8. For each country for which VAT is not assessed for the product, enter the country code in the Country field, select the VAT Exempt check box, enter a reason for the exemption in the VAT Exempt Reason Code field, and click the Add button.

    9. Click the OK button in the ribbon. The product is updated. The Question dialog box appears and asks if you want to update product locations.

    10. Click the Yes button. The Product Location Selection window appears.

    11. Select the locations you want to update, and select all fields, then click the OK button in the ribbon. The product locations are updated.

Note You can also set up product location VAT options on the Selling and VAT tabs in Product Location Maintenance.

11. In Purchase Class Maintenance, set up VAT options for each purchase class.

    1. Select a purchase class, and click the Update button in the ribbon.

    2. Click the VAT Accts tab.

    3. Enter all or part of the VAT general ledger accounts that you want to resolve from the purchase class.

    4. Click the VAT Exempt tab.

    5. For each country for which VAT is not assessed for the purchase class, enter the country code in the Country field, select the VAT Exempt check box, enter a reason for the exemption in the VAT Exempt Reason Code field, and click the Add button.

    6. Click the OK button in the ribbon. The purchase class is updated.

12. In Order Class Maintenance, set up VAT options for each order class.

    1. Select an order class, and click the Update button in the ribbon.

    2. Click the VAT Accts tab.

    3. Enter all or part of the VAT general ledger accounts that you want to resolve from the order class.

    4. Click the VAT Exempt tab.

    5. For each country for which VAT is not assessed for the order class, enter the country code in the Country field, select the VAT Exempt check box, enter a reason for the exemption in the VAT Exempt Reason Code field, and click the Add button.

    6. Click the OK button in the ribbon. The order class is updated.

13. In Location Maintenance, set up VAT options for each location.

    1. Select a location, and click the Update button in the ribbon.

    2. Click the Tax Setup tab.

    3. Enter all or part of the VAT general ledger accounts that you want to resolve from the location.

    4. Enter your company's VAT ID for the location in the VAT ID field.

    5. Enter the supplier code or name of the default VAT supplier to which you will pay VAT on purchase orders for the location in the Default VAT Supplier or Name field.

    6. Click the OK button in the ribbon. The location is updated.

14. In Cost Region Maintenance, if you want to allow users to include VAT in cost matrix amounts for a cost region, select the VAT Inclusive Costing Allowed check box. If you select this check box for a cost region, you must also specify the country for the cost region.

15. In Purchase Cost Matrix Maintenance, set up purchase cost matrices with or without VAT amounts based on the options you selected in step 14.

16. In Price Region Maintenance, if you want to allow users to include VAT in price matrix amounts for the price region, select the VAT Inclusive Pricing Allowed check box.  If you select this check box for a price region, you must also specify the country for the price region.

17. In Customer Price Maintenance, Product Price Maintenance, and/or Price Book/Product Profit Price Maintenance, set up price matrices with or without VAT amounts based on the options you selected in step 16.

18. In Purchase Additional Charge Maintenance, set up VAT options for each purchase additional charge.

    1. Select a purchase additional charge, and click the Update button in the ribbon.

    2. Click the VAT Accts tab.

    3. Enter all or part of the VAT general ledger accounts that you want to resolve from the purchase additional charge.

    4. Click the VAT tab.

    5. For each country for which VAT is assessed for the purchase additional charge, select the VAT Taxable check box, enter the supplier code of the default VAT supplier to which you will pay VAT on purchase orders for the country in the Default VAT Supplier field, enter the country code in the Country field, enter the default VAT class in the VAT Class Code field, and click the Add button.

    6. For each country for which VAT is not assessed for the purchase additional charge, enter the country code in the Country field, enter a reason for the exemption in the VAT Exempt Reason Code field, and click the Add button.

    7. Click the OK button in the ribbon. The purchase additional charge is updated.

19. In Order Entry Additional Charge Maintenance, set up VAT options for each order entry additional charge.

    1. Select an order entry additional charge, and click the Update button in the ribbon.

    2. Click the VAT Accts tab.

    3. Enter all or part of the VAT general ledger accounts that you want to resolve from the order entry additional charge.

    4. Click the VAT tab.

    5. For each country for which VAT is assessed for the order entry additional charge, select the VAT Taxable check box, enter the country code in the Country field, enter the default VAT class in the VAT Class Code field, and click the Add button.

    6. For each country for which VAT is not assessed for the order entry additional charge, enter the country code in the Country field, enter a reason for the exemption in the VAT Exempt Reason Code field, and click the Add button.

    7. Click the OK button in the ribbon. The order entry additional charge is updated.

20. In Supplier Maintenance, set up VAT options for each supplier to which you will pay VAT amounts.

    1. Select a supplier, and click the Update button in the ribbon.

    2. Click the Ship From tab.

    3. For each ship-from address for which VAT will be assessed, click the Update button, enter the ship-from address tax identification number in the Supplier VAT ID field, enter the default VAT supplier code or name, and click the OK button.

    4. Click the Account Masks tab.

    5. Enter all or part of the VAT general ledger accounts that you want to resolve from the supplier.

    6. Click the Other Options tab.

    7. Enter the supplier's tax identification number in the Supplier VAT ID field.

    8. Click the OK button in the ribbon. The supplier is updated.

21. If you will track VAT for multiple countries, set up VAT groups (of customers) in VAT Group Maintenance.

22. In Customer Maintenance, set up VAT options for each customer that may pay you VAT amounts.

    1. Select a customer, and click the Update button in the ribbon.

    2. Click the Ship-To tab.

    3. For each ship-to address for which VAT will be assessed, select the address, click the Update button, enter the ship-to address tax identification number in the Customer VAT ID field, and click the OK button.

    4. For each ship-to address for which VAT will be calculated using a VAT rule, select the address, click the Update button, enter the VAT group code for the ship-to address in the VAT Group Code field, and click the OK button.

    5. For each ship-to address for which VAT will not be assessed, select the address, click the Update button, select the VAT Exempt check box, enter the exemption reason in the VAT Exempt Reason Code field, and click the OK button.

    6. Click the Sales tab.

    7. Enter all or part of the VAT general ledger accounts that you want to resolve from the customer in the Output VAT and Output VAT Variance fields.

    8. Enter the customer's tax identification number in the Customer VAT ID field.

    9. If VAT will be calculated for the customer using a VAT rule, enter the VAT group code for the customer in the VAT Group Code field.

    10. Select whether imported order amounts include VAT by default.

Note You can also set up this option in EDI Trading Partner Maintenance, and this can be overridden in each import file.

8. 9. Click the OK button in the ribbon. The customer is updated.

23. In Tax Control Maintenance, set up default VAT options.

    1. Click the Update button in the ribbon.

    2. Click the VAT tab.

    3. For each general ledger account, set up the account resolution order using the up and down arrow buttons.

    4. Enter the default output VAT account in the Default Output VAT Account field.

    5. Enter the default input VAT account in the Default A/P VAT Account field.

    6. Enter the default country for voucher entry in the Default A/P Country field.

    7. Enter the default input VAT class in the Default A/P VAT Class Code field. The default tax rate appears in the Default A/P VAT Rate field.

    8. Enter the default input VAT exempt reason code in the Default A/P VAT Reason Code field.

    9. If you want to allow users to specify VAT status codes for voucher entry, select the Use VAT Status check box.

    10. Click the OK button in the ribbon. The settings are updated.

24. If you will track VAT for multiple countries and some customers have situations in which they do not pay the usual VAT rate for the country, set up VAT rules to handle this situations in VAT Rule Maintenance.

25. If you need to default different VAT options for specific accounts (such as for operations in multiple countries), in Account Maintenance, set up default VAT options.

    1. Enter an A/P Trade, A/R Discount, A/R Trade, or A/R Write-Off category account in the G/L Account field.

    2. Click the Update button in the ribbon.

    3. Click the VAT tab.

    4. If the account is an A/R Discount, A/R Trade, or A/R Write-Off category account, enter the default output VAT account in the Default Output VAT Account field, and skip to substep i.

If the account is an A/P Trade category account, enter the default input VAT account in the Default A/P VAT Account field, and continue to the next substep.

20. 5. Enter the default country for voucher entry in the Default A/P Country field.

    6. Enter the default input VAT class in the Default A/P VAT Class Code field. The default tax rate appears in the Default A/P VAT Rate field.

    7. Enter the default input VAT exempt reason code in the Default A/P VAT Reason Code field.

    8. If you want to allow users to specify VAT status codes for voucher entry for the account, select the Use VAT Status check box.

    9. Click the OK button in the ribbon. The settings are updated.

    10. Repeat substeps a to i for all accounts.

Note You can also use General Ledger Account Import to import accounts with default VAT options.

You can now track VAT amounts. For more information see, Tracking VAT.

For a visual representation of the setup, see VAT Setup Diagram.

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