Before you can enter the company sales and purchasing documents, check that the VAT functionality is correctly configured.
Before you can enter the company sales and purchasing documents, check that the VAT functionality is correctly configured.
If your organization consists of multiple entities that operate in different tax legislations, you need to configure the VAT functionality in such way that each entity can comply with the tax laws of the country of its tax registration.
You have to choose Single-Country mode of Tax Accounting if your organization consists of a single entity or if all the entities operate and file tax returns in the same country. In this case, you need to specify the country of tax registration and then select the tax options applicable to the organization from the list of tax options available for the selected country of tax registration.
You have to choose Multi-Country mode of Tax Accounting if your organization consists of multiple entities and different entities operate and file tax returns in different countries. In this case, you need to select all the countries where the entities operate and then select the all the tax options applicable at least to one of the entities from the list of joint list of tax options available for the selected countries of tax registration.
Make sure that the VAT Accounting check box is selected.
In the Output VAT Transaction Method field, one of the following options is selected:
This option (if selected) enables the functionality of group taxation. Some of your entities if registered as a tax group can file
consolidated tax returns on behalf of all group members. For example, several entities under common ownership that use a single consolidated accounting system may be registered as a tax group and will be treated as a single taxable person for VAT purposes.
A tax group must include one Representative Member that will file VAT Returns on behalf of other (ordinary) group members. All entities of a tax group must use the same TRN (Tax Registration Number). For more information, refer to Overview of Tax Groups.
Tourist Tax Refund
Select this option if your organization has tourists as customers. The option enables the functionality that helps you process tourist request for refunds on the Value Added Tax (VAT) incurred on their purchases made during their stay in the UAE. For more information, refer to The Tax Refund for Tourists scheme.
Tracking of Zero-Rated and VAT-Exempt Purchases
Select this option to be able to track zero-rated and exempt purchases and view the corresponding data in VAT Return and other reports. For using this option, no additional configuring is required.
Tracking of Out-of-Scope Sales
Select this option if some of sales are outside of the scope of VAT according to the legislation of the entity's country of tax registration. If this option is selected, you need to review the default list of Out-of-Scope Reasons and add new reasons if needed.
Tracking of Out-of-Scope Purchases
Select this option to track the supplies from companies that are outside of the scope of VAT for the country of tax registration. If this option is selected, you need to review the default list of Out-of-Scope Reasons and add new reasons if needed.
VAT Accounting by Emirate
This option appears if you selected UAE as a country of tax registration for any entity. Select this option, because each company operating in UAE must report all the VAT-related data by emirate.
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.
Enable E-Invoicing for KSA entities
This option appears if you selected Saudi Arabia as a country of tax registration for any entity. Select this option if at least one of the entities operates in Saudi Arabia and meets the requirements for E-invoicing. You will need to configure a connection to the Fatoora portal.
Note that the list of taxes is predefined. Make sure that VAT is available on this list of taxes.
Review the VAT rates available. Generally, the VAT rates that are in effect in the countries of tax registration are predefined. Although, you can add a new rate if needed.
If the Enable Tax Groups option is selected, you can create one or more tax groups. Tax groups can be created at any time - the functionality allows you to set the start date which becomes the end date when you need to re-group the entities in another way. for details, refer to Adding a Tax Group.
On the Entities form, for each entity, open the Tax Accounting tab and check the following:
For more information, see Entities.
For each company that is a customer or supplier, check the VAT settings on the Tax Accounting tab:
For more information, see Companies.
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.