How to: Set Up Unrealized VAT for Cash-Based Accounting
If you're using cash-based accounting methods, you can set up Microsoft Dynamics NAV to handle unrealized VAT.
To use general ledger accounts for unrealized VAT
You can choose to have VAT amounts calculated and posted to a temporary general ledger account when an invoice is posted, and then posted to the correct general ledger account and included in VAT statements when the actual payment of the invoice is posted. Before you can do this, you must complete the VAT posting setup.
To use accounts for unrealized VAT, follow these steps:
- Choose the
icon, and enter General Ledger Setup. - On the General Ledger Setup page, on the General FastTab, choose Show More, and then choose the Unrealized VAT check box.
- Close the page.
- choose the Search for Page or Report icon , and enter VAT Posting Setup.
- On the VAT Posting Setup page, choose the VAT posting group, and then choose Edit.
- In the Unrealized VAT Type field, choose an option to specify how to allocate payments to the invoice amount (excluding VAT) and the VAT amount itself, and how to transfer VAT amounts from the unrealized VAT account to the realized account. The following table describes the options.
| Option | Description |
|---|---|
| Blank | Choose this option if you don't want to use the unrealized VAT feature. |
| Percentage | Payments covers both VAT and the invoice amount in proportion to the payment's percentage of the remaining invoice amount. The paid VAT amount is transferred from the unrealized VAT account to the realized VAT account. |
| First | Payments cover VAT first and then invoice amounts. In this case, the amount transferred from the unrealized VAT account to the VAT account will equal the amount of the payment until the total VAT has been paid. |
| Last | Payments cover the invoice amount first and then VAT. In this case, no amount will be transferred from the unrealized VAT account to the VAT account until the total amount of the invoice, excluding VAT, has been paid. |
| First (Fully Paid) | Payments will cover VAT first (like the First option), but no amount will be transferred to the VAT account until the full amount of VAT has been paid. |
| Last (Fully Paid) | Payments will cover invoice amount first (like the Last option), but no amount will be transferred to the VAT account until the full amount of VAT has been paid. |
In the Sales VAT Unreal. Account field, choose the account for unrealized sales VAT.
Note
The VAT amount will be posted to this account, and stay there until the customer payment is posted. The amount is then transferred to the account for sales VAT.
In the Purch. VAT Unreal. Account field, enter the general ledger count for unrealized purchase VAT.
Note
The VAT amount will be posted to this account, and stay there until the customer payment is posted. The amount is then transferred to the account for sales VAT.