Create VAT Account Definition – A summary of the activity
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Value Added Tax (VAT) is an indirect tax that is imposed on the net value addition on the goods and services provided by a business. VAT can be defined for the goods, the articles or the services. Its focus is on removing the cascading effect of taxes, and ultimately reducing the tax burden that will be borne by the consumer. Value addition refers to the actual value, in terms of money, that is added on to a commodity, goods or services, in their supply to the consumers.
This activity allows you to define standard account rule for Value Added Tax (VAT) and is specific to Swiss VAT. You can automate the selection and posting of accounts of VAT transactions through this activity. The Account Rule Definition component (VAT account definition activities) is designed for automatically defaulting the relevant VAT account codes during purchase, and sales transactions, involving financial postings.
This activity specifies the default accounts while raising documents in VAT. Account rule definition component reduces the need for the user to specify an account head everytime a transaction is posted. An account rule is defined for a combination of VAT core category, VAT account type and for the item or TCD code.
VAT Category
The accounting rule for any VAT related posting is based on the VAT Category and VAT Account Type combination. Vat categories are pre-defined in the system and in addition, they can also be user defined as defined in the “VAT Setup” business component. The predefined VAT categories are National Sale, National Purchase, Export Sale, Import Goods, Import Service, Customs VAT, Urprod Sale (Without VAT), Urprod Purchase, Output VAT exempted and Input VAT exempted.
VAT Account Type
VAT account types are pre-defined in the system. The VAT account types, which can be mapped to the VAT core categories are - VAT Collected, VAT Deductible, VAT Non-Deductible, VAT Deductible Charges, VAT Non-Deductible Charges, VAT Deductible Discounts, VAT Non-Deductible Discounts, VAT Collected Charges, VAT Collected Discounts, VAT Customs Deductible and VAT Customs Non- Deductible.
As per the Swiss VAT laws, the following predefined VAT Categories - National Sale, National Purchase, Import Service, Customs VAT and UnprodPurchase are mapped to VAT Account Types in the “VAT Setup “business component. Mapping VAT Account Types to user defined VAT Category is optional and is dependant on the business need.
This activity helps you in defining an account rule for the combination of VAT category, VAT account type and part / Vatable taxes and charges mapped to a VAT group. You can carry out the search for the part / Vatable taxes and charges mapped to VAT groups using the code identifying the VAT group, the code identifying the part / TC code, the code identifying the part / TC variant. The system retrieves the details in the multiline based on the search criteria.
This page allows you to default the account code / cost center (optional) in the multiline by directly specifying the account code in the Account Code Details cluster box. There is a provision by which the system displays the default analysis code and sub analysis code assigned for the account code. Thus by defaulting the account code, the time taken in entering them in the multiline is considerably reduced. You can also enter the account code in the multiline. You can also seek the help provided in this screen for entering the account code and analysis code.
What you can do in this activity
The account code details can be defaulted by providing account code information.
Go to “Create VAT Account Definition” page.
Enter the account code details which is to be defaulted for all the part or tax or charges retrieved in the multiline.