Before you can enter the company sales and purchasing documents, check that the VAT functionality is correctly configured.
1. Make sure the VAT functionality is turned on
Where: Administration > Settings > General Settings
On the General Settings form, make sure that VAT Accounting check box is selected.
In the Output VAT Transaction Method field, one of the following options is selected:
- Exclude from Revenue: To not include the output VAT amounts in revenue
- Include in Revenue: To include the output VAT amounts in revenue
If the VAT Accounting by Emirates check box is selected, you will need to specify the default emirate for each entity of your company, for each customer and supplier. After that, when entering sales and purchase documents, you will need to specify the emirates associated with each transaction. The data in reports will also be arranged by emirate.
If your company needs to include tax-exempt and standard-rated supplies in the same documents, select the Advanced VAT Calculation check box. For more information on available options, refer to General Settings.
2. Types of taxes
Where: Taxes > See Also > Tax Types
Note that the list of taxes is predefined. By default, VAT is available on this list of taxes.
3. VAT rates
Where: Taxes > See Also > Tax Rates
The rates that are in effect in UAE are predefined:
- Standard Rate (5%)
- Zero Rate ( 0%)
- VAT-Exempt (0%)
4. VAT settings for the Entities
Where: Accounting > Master Data > Entities
On the Entities form, for each entity, open the Tax Accounting tab and check the following:
The VAT Taxpayer check box is selected.
The History of Changes link is available. The link appears after you enter in the Apply From field the date starting which VAT should be applied and click OK.
The tax registration number (TRN) for this entity is specified.
In the Emirate field, the default emirate is selected.
The Prices include VAT check box is selected.
For more information, see the Entities topic.
5. VAT settings for other companies (customers and suppliers)
Where: Sales > Master Data > Companies
For each company that is a customer or supplier, check the VAT settings on the Tax Accounting tab:
- The VAT Taxpayer check box is selected.
- The tax registration number (TRN) for this company is specified
- The Prices include VAT check box is selected.
For more information, see Companies.
6. VAT Settings for Items and Services
Where: Sales > Master Data > Items
For each item and service, on the Accounting Parameters tab, make sure that the default VAT rate applicable to the item or service is specified.