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This option appears if you selected UAE as a country of Tax tax registration for any entity. You don't need to select this option if your business in UAE is limited to only one emirate.  Select this option if your business in UAE expands to multiple emirates and you need to file , because each company operating in UAE must report all the VAT-related data and VAT Returns by emirate. With this option selected, you will need to specify the emirates associated with each sales and purchase transaction.
Selecting the option enables the Emirate field / column in the sales documents. If all the entity's transactions are within the same emirate, you can select this emirate as the default emirate in the entity master record and this emirate will automatically appear in such fields/columns.

Additional configuring for this option includes specifying default emirates for each entity of your company, emirate for each customer and supplier.

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