VAT Posting Setup
For correct VAT posting, you need to set up general information on taxes in Tax Setup and periods for VAT posting in Tax Periods. You also need to specify the rules for VAT posting in VAT Posting Setup and set up and assign VAT business posting groups for Customers and VAT product groups for items and services.
Tax periods
To create tax periods:
-
Select the
icon, enter Tax Periods, and then choose the related link. -
On the Tax Periods page, go to Actions => Functions => Create a Period.
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In the Create Tax Period window, fill out the following fields:
Field Description Starting Date Specifies the start date of a new tax period. Usually the start of a calendar year. NoPeriods Specifies the number of periods to be created. For Ukraine, the number of periods stipulated by the law is 12. Periods Length Specifies the tax period length. For Ukraine, the tax period length stipulated by the law is one calendar month (indicated as 1М in the system).
Note
Tax periods are created in order. It is not possible to create a new tax period earlier than a previously created period.
Tax Periods Page
The Tax Periods page includes the following fields:
| Field | Description |
|---|---|
| Start Date | This field specifies the start date of the tax period. |
| Name | This field defines the name of the tax period. After using the Create Period function, the field will be automatically filled out. |
| Closed | This field displays the status of the tax period - Closed or Open. It is automatically marked after using the Close Period function. |
| VAT Allocation Ratio | This field indicates the Allocation ratio of items/services, non-current assets in taxable operations for the current reporting period if the organization has both taxable and non-taxable VAT income. |
| Annual VAT Allocation Ratio | This field indicates the Allocation ratio calculated during the annual recalculation. For more details, refer to Annual VAT Recalculation. |
To close a tax period, on the Tax Periods page, select the required tax period and Actions => Functions => Close Period. After the tax period has been closed, it is not possible to create and record tax documents in this period.
To open a closed tax period, select a closed tax period and then select Actions => Functions => Open Period.
Tax Setup
- Select the icon, enter Tax Setup, and then choose the related link.
- The following settings can be made on the page:
| Field | Description |
|---|---|
| Check Tax Periods | Enable if you need to check whether the tax period is closed when processing VAT Invoices or Appendices 2. |
| VAT Invoice posting without registration | Select the types of documents for which registration verification will not be performed, and the Registration Confirmed flag will be automatically set when posting such a document. |
| Price Rounding Precision | Specify the size of the interval to be used when rounding the price in tax documents. |
| Quantity rounding precision in XML | Specify the size of the interval to be used when rounding the quantity in tax documents during XML export, taking into account a maximum of 12 decimal characters. |
| Service Unit of measure Code | Define the unit of measure for transactions with the G/L Account line type that will be used when exporting to XML. |
| FA Unit of Measure Code | Define the unit of measure for transactions with the Fixed Asset line type that will be used when exporting to XML. |
| VAT Inv. Registrar No. | Select the employee responsible for registering VAT invoices. |
| VAT Inv. Registrar Name | The field will be filled automatically with the name of the employee selected in the VAT Inv. Registrar No. field, or the value can be entered manually. |
| Use Customs Category from Tracking | Enable, if necessary, for sales, the Customs Category Code for lot items to be inherited from the Lot No. Information Card. Available only for items with lot tracing. |
| Check Source VAT Registration No. | Enable, if necessary, for the system to check the filling of the Source VAT Registration No. on the customer card when creating a VAT invoice, and its presence in the document during XML export. |
| eReporting Service | Specifies the service for exchanging VAT invoices. |
| Use Altern. Sales VAT Amount | Use initial cost for VAT invoice on sales below cost. When the parameter is set, the calculation of the Amount (LCY) field changes in the sales order line and the posted sales invoice. This field is used to calculate the amount excluding VAT in the sales order line and the posted invoice. For foreign currency sales, the field is no longer calculated as before Amount excluding VAT multiplied by the currency exchange rate. Instead, it is calculated as the Base Amount for the Amount including VAT in the local currency (LCY). Additionally, when the parameter is enabled, the value of the Amount (LCY) field is directly used to calculate the "Price Excl. VAT" and, accordingly, the "Base Amount" values in the VAT Sales Invoice line. |
| Max VAT Document Lines | Specifies the maximum number of lines in the VAT invoices for sales below COGS and VAT invoices for retail trade (for the SMART Retail Localization for Ukraine app). |
The Sales tab specifies the necessary settings for generating specific sales documents:
- Sales Prep. VAT Prod. Group and Prepayment Item No. - define the default VAT Product Group and item to be used when creating lines of a VAT invoice for advance payment not applied to an order or sales invoice.
- VAT Bus. Group for Sales below cost and Sales Below Cost Text - define the default VAT Business Group and the text added to describe items in the lines of a total VAT invoice for sales below cost.
- Use initial cost for VAT invoice on sales below cost - determines that for imported lot or serial items, when calculating the tax base for VAT invoice on sales below cost, the purchase price of these goods will be taken without considering additional costs.
- Check the Sales VAT Inv. - specifies whether the correct completion of the Sales VAT Invoice for the export provision mode will be checked.
- Unit of Measure for export provision - specifies unit of measure for provision export.
The Purchase tab specifies the necessary settings for generating specific purchase documents:
- Purch. Prep. VAT Prod. Group and Purch. Prep. VAT Invoice Text - specifies the default VAT Product Group and the text for the Description field in the VAT invoice for purchases on advance payment not applied to an order or purchase invoice.
- Gen. Bus. Group for VAT revaluation - specifies the General Business Group used for revaluation of purchased items, services, fixed assets, the value of which includes the VAT amount on purchase. For example, a purchase subject to the distribution of VAT by usage or a purchase intended for non-business use.
On the Versions for XML tab, the current versions of documents for export in XML format are indicated in the corresponding fields.
In the No. Series tab, codes of series numbers used by the system for assigning numbers to documents are defined.
VAT Posting Setup
The calculation of the VAT amount for sales and purchases in the system is based on VAT Posting Setup represented by combinations of VAT business groups and item groups. For each combination, you can specify the VAT percentage, VAT calculation type, general ledger accounts for VAT posting for sales and purchases, and other required fields. To perform the settings:
- Select the icon, enter VAT Posting Setup, and then choose the related link.
- Fill out all required fields in the rows for VAT business Posting groups and VAT product posting groups combinations.
| Field | Description |
|---|---|
| VAT Account | This field specifies the account number of the general ledger for VAT closure (confirmed). |
| VAT Invoice Tax Code | This field indicates the VAT rate code for the VAT invoice for XML export. The following codes are possible: 20 - for operations subject to 20% VAT; 7 - for operations with 7% VAT; 901 - export operations (0% VAT rate); 902 - supply at 0% rate on the customs territory of Ukraine for goods/services; 903 - for VAT-exempt supplies. |
| Appendix Tax Code | This field specifies the VAT rate code for the Adjustment Calculation to the VAT invoice. |
| G/L Account for annual VAT recalculation (Revenue) | This field specifies the general ledger account for income when reducing compensating obligations during the annual VAT recalculation. |
| VAT Claim G/L Account | This field specifies the general ledger account for VAT refund. |
| G/L Account for annual VAT recalculation (Costs) | This field specifies the general ledger account for expenses when reducing compensating obligations during the annual VAT recalculation. |
| No VAT Amount | This field indicates whether VAT is not charged on operations. |
| VAT Inv.Keeping Reason | This field specifies the code for the reason for keeping the VAT invoice, allowing the operation to be tracked. |
| Code of sequential number VAT Invoice | Specifies whether a code will be added to the serial number of the VAT sales invoice (in its second part). |
| G/L Account for compensative VAT obligation | This field specifies the general ledger account for compensating obligations. |
VAT Business Group Settings
VAT business groups are assigned to customers and vendors and are responsible for VAT calculation and posting. To configure VAT business groups, follow these steps:
- Click the button to open the Search function and enter VAT Business Groups.
Then click on the corresponding link.
- On the VAT Business Groups page, click New to create a new business group. Fill in the following fields:
| Field | Description |
|---|---|
| VAT Registration No. | Taxpayer Identification Number. This field is used to enter conditional TINs for VAT business groups where they are applicable. |
| VAT Non-Payer | Indicates whether the customer or vendor assigned to this business group is a VAT non-payer. |
| VAT to Unit Cost | Specifies the method of allocating VAT to the cost for generating VAT invoices with compensating tax liabilities. 100% VAT on Cost means that the entire VAT amount will be allocated to the cost of the item/service. VAT allocation % means that the VAT amount will be distributed according to the usage ratio. |
| Not create App+Inv For Cr.Memo | Allows specifying that VAT Invoice and Adjustment Calculation will not be created for a Credit Memo document. |
| Service Import | Indicates whether a sales VAT invoice should be generated from a purchase order or advance payment (applied to issued orders) for imported services. |
| VAT Invoice Creation | Specifies the method of creating VAT invoices and adjustment calculations. Possible options include: First Event - VAT invoice will always be created based on the first event; Invoice - VAT invoice will be created based on the posted invoice; First Event by Order - VAT invoice will be created based on the first event of each individual order; Total VAT Invoice - Total VAT invoice will be created; First Event by Agreement - VAT invoice will be created based on the first event posted under a separate contract; Payment - VAT invoice will be created based on payment. |
| Non-Resident | Indicates whether the VAT business group is assigned to a non-resident counterparty for issuing VAT invoices for exports. |
Adjustment reasons
According to the legislation of Ukraine, in the Adjustment Calculation to the VAT invoice, it is necessary to indicate the code of the adjustment reason. To set the adjustment reasons:
- Select the icon, enter Adjustment reasons, and then choose the related link.
- On the Adjustment Reasons page, click New and fill out the Code, Description and Adjustment Type fields.
Note
Adjustment reason codes must comply with the legally adopted Directory of conditional adjustment reason codes.
VAT Invoice Keeping Reasons
For VAT invoices marked “Not subject to provision to the recipient (buyer) for a reason”, it is necessary to configure the reason codes for not issuing a VAT invoice. To do it:
- Select the icon, enter VAT Invoice Keeping Reasons, and then choose the related link.
- On the VAT Invoice Keeping Reasons page, click New and fill out all required fields.
| Field | Description |
|---|---|
| Code | Specifies the code of the reason why a VAT invoice is not issued to the customer. |
| Description | Specifies the description of the Invoice Keeping Reason Code. |
The codes for the reasons for non-issuance of VAT invoices must comply with the legally approved Procedure for Filling Out a VAT Invoice. To ensure this, please configure the following settings:
| Field | Description |
|---|---|
| KVED Code Not Required | The item code according to Customs Category must be indicated at all stages of the supply chain, from the manufacturer or importer to the final consumer, regardless of the purchase or production date of the item: for excisable and imported items - 10 digits, for other items -at least 4 digits. Exceptions are made for the following reason types: "04" "08" "09" "13" and "15" where the Customs Category code is not required. Since the Customs Category code is a mandatory requisite of the VAT invoice, this field should not be enabled except for exceptional types of reasons. |
| Skip Customs Category Code | Enable if you need to exclude the Customs Category field when exporting to XML a file for a VAT Invoice Keeping Reason. Since the Customs Category code is a mandatory requisite of the VAT invoice, this field should not be enabled except for exceptional types of reasons. |
| Skip Imported Item | Enable if you need to exclude the Imported Item field when exporting to xml a file for a VAT Invoice Keeping Reason. If the item is domestically produced, this function must be enabled. |
| Skip Service Code DKPP | Service Code DKPP field will be skipped when exporting to XML a file for a VAT Invoice Keeping Reason. A mandatory requisite of the VAT invoice, so it should be enabled only for exceptional types of reasons. |
| Skip Unit Of Measure | Enable if you need to exclude the Unit of Measure field when exporting to XML a file for a VAT Invoice Keeping Reason. |
| Skip Unit Of Measure Code | Enable if you need to exclude the Unit of Measure Code field when exporting to XML a file for a VAT Invoice Keeping Reason. |
| Skip Quantity | Enable if you need to exclude the Quantity field when exporting to XML a file for a VAT Invoice Keeping Reason. |
| Skip Price Excl. VAT | Enable if you need to exclude the Price Excluding VAT field when exporting to XML a file for a VAT Invoice Keeping Reason. |
| Skip VAT Invoice Tax Code | Enable if you need to exclude the VAT Invoice Tax Code field when exporting to XML a file for a VAT Invoice Keeping Reason. |
| Skip Privileges Code | Enable if you need to exclude the Privileges Code field when exporting to XML a file for a VAT Invoice Keeping Reason. |
| Skip VAT Amount | Enable if you need to exclude the VAT Amount field when exporting to XML a file for a VAT Invoice Keeping Reason. |
| Non Production Use | The indicator of the transaction in accordance with Clause 198.5 of Article 198 and Clause 199.1 of Article 199 of Chapter V of the Code. The indicator will be displayed when generating Appendix 1 of the VAT Declaration. |
| Export Provision | Specifies the export provision. If this option is enabled, the version of the VAT invoice is determined based on the Doc. Version VAT Invoice export provision field in the Tax Setup. |
| Agreement Data Export | Specifies whether the date and number of the foreign economic agreement will be exported. |
| CD Data Export | Specifies whether the date and number of the customs declaration will be exported. |
| Fill fields from the vendor's VAT invoice | Specifies that the necessary fields will be filled in from the vendor's VAT invoice. |
| UOM from Setup | Specifies that the unit of measure will be filled in from the setup. |
The automatic filling of the reason for non-issuance on VAT invoices can be configured on the VAT Posting Setup page for the required combination of the VAT Bus. Posting Group and VAT Prod. Posting Group.
Units of Measure for XML format of VAT documents
For the XML format of VAT documents, Units of Measure must be set up. To do this:
- Select the icon, enter Units of Measure, and then choose the related link.
- On the Units of Measure page, fill out the Unit of Measure Code and Description for XML fields.
Note
The Unit of Measure Code and Description for XML fields must comply with the Classifier of the notation system for units of measure and accounting.
See Also
Setting up VAT Calculation and Accounting Methods
Creating Purchase VAT Invoices
Creating VAT Appendix 2 for Purchase VAT Invoices
Generating Sales VAT Invoices for a Period
Creating VAT Appendix 2 for Sales VAT Invoices