Yearly tax communication

The Yearly tax communication report contains annual tax information for Italy that will be submitted to the tax authority.

Prerequisites

Configure Microsoft Dynamics 365 Finance for Italian sales tax books functionality by following the instructions in Italian sales tax books.

As of Dynamics 365 Finance version 10.0.38, the Yearly tax communication feature supports reporting for multiple value-added tax (VAT) registrations.

Note

In the Feature management workspace, turn on the Enable Settlement period for Italian Yearly tax communication feature. For more information, see Feature management overview.

The Enable Settlement period for Italian Yearly tax communication feature introduces a new reference to the sales tax settlement period in the Yearly tax communication table. Therefore, you can now create a Yearly tax communication report that has the same ATECOFIN code and year for different sales tax settlement periods, and can report the Yearly tax communication report separately for different (multiple) sales tax settlement periods.

When you enable the feature, the new tables are used as data sources for the Yearly tax communication report, and data from the old TaxYearlyCom_IT and TaxYearlyComReport_IT data sources is populated in the new TaxYearlyComV2_IT and TaxYearlyComReportV2_IT tables. If the new tables already contain records that have the same values in the Years and ATECOFIN Code fields, those records in the new tables are not replaced with data from old tables.

Set up the Yearly tax communication report

1. In Dynamics 365 Finance, go to Organization administration > Organizations > Legal entities.

2. Import the following Electronic reporting (ER) configurations.

   ER configuration name	Type	Description
   Italian tax reports model	Model	Italian tax reports model configuration.
   Yearly VAT communication model mapping	Model mapping	Model mapping for the Italian Yearly tax communication report.
   Yearly tax communication (IT)	Format (exporting)	Yearly tax communication format for Italy.

   Import the latest versions of these configurations. The version description usually includes the number of the Microsoft Knowledge Base (KB) article that explains the changes that were introduced in the configuration version. Use the Issue search tool in Microsoft Dynamics Lifecycle Services to find the KB article by number.

   For more information about how to download ER configurations from the Microsoft global repository, see Download ER configurations from the Global repository.

   Note

   After all the ER configurations from the preceding table are imported, set the Default for model mapping option to Yes for the Yearly VAT communication model mapping configuration on the Configurations page.

3. In Finance, go to Tax > Setup > Parameters > General ledger parameters.

4. On the Number sequences tab, select a number sequence for the Tax communication ID reference.

5. On the Sales tax tab, on the Yearly tax communication FastTab, in the Format mapping field, select the Yearly tax communication (IT) format that you downloaded earlier.

6. Go to Tax > Setup > Sales tax > Yearly tax communication setup.

   

   Note

   To view the "Yearly VAT communication" form for the year 2020, and instructions for it, see Model and instructions - VAT 2020.

7. On the Field setup tab, create lines, and set the following fields on them.

   Field	Description
   Field ID	Enter the identification number of the field.
   Description	Enter a description of the field.
   Format	Select the required format of the field. For more information about the available formats, see the Formats of the fields section later in this article.
   Calculation	Select a calculation method: Manual – The value is manually entered. Tax transaction – The value is collected from the tax transactions. Total – The value is calculated by using a formula that consists of the values of other fields (but only fields where the Calculation field isn't selected).
   Value	Enter a value for the field. You can edit this value only when the Calculation field is set to Manual.
   Tax	Select one of the following values: Tax base – The field should represent a tax base. Tax amount – The field should represent a tax amount. You can edit this value only when the Calculation field is set to Tax transactions.
   Sign	Enter 1 if the value should be represented as is. Enter -1 if the value should be inverted. You can edit this value only when the Calculation field is set to Tax transactions or Total.
   Nondeductible sales tax	If the Calculation field is set to Tax transaction, and the Tax field is set to Tax amount, select this checkbox to reduce the calculated tax amount on the non-deductible tax amount.

   Note

   If any changes are made in the declaration, you must change the field settings.

8. For fields where the Calculation field is set to Tax transactions, on the Selected tax codes tab, select New to add a line for each sales tax code that should be available as a field value.

   

9. Select Exceptions to set up main accounts that should be excluded from the query.

   Create enough unique sales tax codes so that each is linked to a single field in the yearly declaration. This approach helps simplify the setup of the yearly declaration.

   However, if the same sales tax code can be linked to multiple fields, you should set up additional filters for the tax transaction.

10. Select Query, and specify additional filtering rules for posted sales tax. For example, you can specify additional filters for the sales tax direction or sales tax book section.

    You can do the following additional setup for fields where the Calculation field is set to Total. The system can then automatically calculate values for tags that should represent a result that is calculated by using a formula that consists of the values of other fields (but only fields where the Calculation field isn't set to Total).

11. Select the line where the Calculation field is set to Total.

12. On the Total amount tab, select New to add lines for all fields that should be totaled.

    

13. Set the following fields.

    Field name	Description
    Sign	Enter 1 if the value from the field should be taken as is. Enter -1 if the value from the field should be inverted.
    Field ID	Select the field that should be totaled. Fields where the Calculation field is set to Total can't be selected here.

Formats of the fields

Usually, fields values can be either numeric (NU format) or alphanumeric (AN format).

• Numeric (NU) – These values are amounts. They are right-aligned and have a fixed length of 16 characters. Space characters are used for padding,
• Alphanumeric (AN) – These values are strings. They are left-aligned and have a fixed length of 16 characters. Space characters are used for padding.

In the Format column, you can specify a field format. In addition to NU and AN, the following formats are available for selection.

Format	Description	Padding character	Example
CF	Fiscal code (16 characters)	Space	"XXXXXX11X11X111X"
PI	Tax-exempt number (11 characters)	Space	"11111111111"
CN	Numeric fiscal code (11 characters)	Space	"11111111111"
PN	Automotive abbreviation for the Italian province (for example, the province of birth), a space symbol and the value "EE" for foreign countries or regions	Space	"BO   "
Nx	Like NU, but represents formats such as N1, N2, and N3 in official guidelines	Space	"            1234"
CB	Check box, where the values are 1 for a selected state and 0 for a cleared state	Not applicable	"1"
NN	Positive amount (11 characters) or negative amount (11 characters)	Space	"       1234" "      -1234"
DT	Date in DDMMYYYY format	Not applicable	"01012020"
DA	Date in YYYY format	Not applicable	"2020"
NP	Positive numeric field	Space	"            1234"
PC	Percentage and rate that have a maximum of three decimal places	Space	"   100" "   33,333"
PR	Automotive abbreviation for the Italian province (for example, the province of residence)	Space	"BO   "
QU	Numeric field that has a maximum of five decimal places	Space	"    1000,16234" "   0,99" "   3000000,50"

Create a yearly tax declaration

1. Go to Tax > Declarations > Sales tax > Yearly tax communication.

2. Select Create new to create header information for the Yearly tax communication report for the previous year. The number of lines that are created matches the number of Italian sales tax books.

   

3. On the General tab, review the following information.

   Field	Description
   Tax communication ID	The identification number of the Yearly tax communication report.
   Years	The year of the tax communication. This field is automatically set to the previous year. For example, if you're creating the report in 2020, this field is set to 2019.
   ATECOFIN Code	The tax code that is associated with the classification of possible company activities. This field is filled in from the Italian sales tax books page. For more information, see Italian sales tax books.
   Exported	A value that indicates whether the .ivc file has been exported. This field and the next two fields are automatically set when you select Export and generate file.
   Date of export	The date when the .ivc file was exported.
   Export file name	The name of the .ivc file that was exported.

4. Select the required line, and then select Open to open the Yearly tax communication page, which has the information about the selected declaration.

5. On the Header tab, review the following information.

   Field	Description
   Tax communication ID, ATECOFIN Code, and Years	These fields are set as described in the previous table.
   Company information section	Review the information about the company.
   Company name	The name of the company that the Yearly tax communication report is created for.
   Fiscal code	The fiscal code of the company.
   Company tax registration number	The tax registration number of the company.
   Declarer section	Enter information about declarer.
   Type of declarer	Select the type of declarer: Filing for same legal entity Filing through fiscal assistance center (CAF)
   CAF fiscal code	If you selected Filing through fiscal assistance center (CAF) in the Type of declarer field, enter the fiscal code of the fiscal assistance center.
   CAF obligation	If you selected Filing through fiscal assistance center (CAF) in the Type of declarer field, select one of the following values: Declaration prepared by legal entity Declaration prepared by declarer
   CAF inscription number	If you selected Filing through fiscal assistance center (CAF) in the Type of declarer field, enter the inscription number of the fiscal assistance center.
   CAF transmission date	If you selected Filing through fiscal assistance center (CAF) in the Type of declarer field, enter transmission date.
   Writer section	Specify information about the declarer, if the declarer differs from the taxpayer.
   Writer	Select the employee's name.
   Writer fiscal code	Enter the fiscal code of the declarer.
   Writer role	Select the declarer's role: Legal representative – The declarer is a managing partner. Administrator of underaged – The declarer is an administrator for minors or for people who have disabilities. Controller of sequestered goods – The declarer is an administrator for seized goods. Fiscal representative – The declarer is a tax representative for non-residents. General legatee – The declarer is an heir to the company. Liquidator – The declarer is an administrator for voluntary liquidation. Extraordinary operator – The declarer is a representative who submits tax declarations on behalf of a company that no longer exists because of a merger, acquisition, or other extraordinary transaction. Bankruptcy curator – The declarer is an administrator for bankruptcy. Commissioned liquidator – The declarer is an administrator for liquidation. Non-resident – The declarer is a tax representative for non-residents. The tax representative transfers items on behalf of a non-resident and doesn't pay VAT. The company or individual who accepts the items is required to pay VAT. For more information, see article 44, paragraph 3, of D.L. No 331/1993. Legal guardian – The declarer is a guardian for a minor who is an heir to the company. Sole proprietor liquidator – The declarer is an administrator who is responsible for disposing of company equipment during a voluntary liquidation. Property manager – The declarer is a manager of the property. Public representative – The declarer is a representative who signs the declarations on behalf of the government. Public liquidator – The declarer is a liquidator who works on behalf of the government.
   Appointment date	Enter the date of the declarer's nomination.
   Fiscal code	Enter the fiscal code of the declaring company.
   Birth city or foreign country/region, Birth county, Birth date, Gender, First name, Last name, and Telephone	Enter additional information about declarer.
   Dates	Specify information about procedure start and end dates.
   Procedure start date	Enter the start date of the procedure.
   Procedure end date	Enter the end date of the procedure.
   Correction	Select the type of correction: Correction Supplementary declaration Additional declarations Additional declarations (2)

6. On the Report lines tab, review or edit the lines and amounts that you previously set up for the Yearly tax communication report on the Yearly tax communication setup page. For lines where the Calculation field is set to Manual, manually enter the amounts.

7. On the Details tab, review or edit the details of each line on the Yearly tax communication report.

8. Close the Yearly tax communication page that has the information about the selected declaration.

9. On the Yearly tax communication page that has the list of declarations, select Export.

10. In the Create export file dialog box, in the File name field, enter a value. Then select OK to create and export the .ivc file.

11. Select Delete export to delete the .ivc file that has been created and exported.

Appendix 1. Structure of the yearly VAT declaration

The following table provides an example of the structure of the yearly VAT declaration. This example is based on the 2020 declaration. Sections that aren't included in the setup example are italicized.

Section (EN)	Fields
PART VA INFORMATION AND DATA RELATING TO THE ACTIVITY
Section 1 - General analytical data	VA001001-VA005004
Section 2 - Data summary relating to all activities carried out	VA010001-VA015001
PART VB DATA RELATING TO IDENTIFICATION DETAILS OF FINANCIAL RELATIONS
	VB001001-VB007004
PART VC EXPORTERS AND ASSOCIATED OPERATORS
Purchases and imports without the application of value added tax relating to all activities carried out.	VC001001-VC014003
PART VD TRANSFER OF VAT CREDIT BY ASSET MANAGEMENT COMPANIES
Section 1 - Transferring company - List of transferee companies or body	VD001001-VD021002
Section 2 - Company or transferring body - List of ceding companies	VD031001-VD056001
PART VE CALCULATION OF BUSINESS TURNOVER AND THE TAX RELATIVE TO TAXABLE OPERATIONS (Comment: Sales and output VAT on sales)
Section 1 - Conferring of agricultural products and transfers by exempt agriculturalists (in the case of the limit being exceeded by more than a third)	VE001001-VE012002
Section 2 - Taxable agricultural operations and taxable commercial or professional operations	VE020001-VE023002
Section 3 - Total taxable amount and tax	VE024001-VE026002
Section 4 - Other operations	VE030001-VE040001
Section 5 - Business turnover	VE050001
PART VF LIABILITY OPERATIONS AND ADMISSIBLE DEDUCTIBLE VAT (Comment: Purchases and input VAT on purchases)
Section 1 - Total amount of purchases carried out in the national/regional territory of intracommunity purchases and imports	VF001001-VF022001
Section 2 - Total purchases and imports, total tax, intra-community purchases, imports, and purchases from San Marino	VF023001-VF027004
Section 3 - Calculation of admissible deductible VAT	VF030001-VF030009
Section 3-A - Exempt operations	VF031001-VF033001, VF034001-VF037001
Section 3-B - Agricultural business (art.34)	VF038001-VF055001
Section 3-C - Special cases	VF060001-VF062002
Section 4 - Admissible deductible VAT	VF070001-VF071001
PART VJ CALCULATION OF TAX ON CERTAIN TYPES OF OPERATIONS (Comment: Output VAT on purchase reverse charge)
	VJ001001-VJ019002
PART VI DECLARATIONS OF INTENT RECEIVED
	VI001001-VI006002
PART VH CHANGES OF PERIODIC COMMUNICATIONS
	VH001001-VH017001
PART VM PAYMENT FOR EU AUTOMOBILE REGISTRATIONS
	VM001001-VM012001
PART VK CONTROLLING AND CONTROLLED COMPANY
Section 1 – General data	VK001001-VK001004
Section 2 - Calculation of tax surplus	VK020001-VK028001
Section 3 - Termination of control during the year Data relating to the period of control	VK030001-VK036001
PART VN SUPPLEMENTAL DECLARATIONS IN FAVOUR
	VN001001-VN004005
PART VQ OMITTED PERIODICAL PAYMENTS
	VQ001001-VQ005010
PART VL PAYMENT OF ANNUAL TAX
Section 1 - Calculation of VAT due or input VAT for the tax period	VL001001-VL004001
Section 2 - Credit from previous year	VL008001-VL012002
Section 3 - Calculation of output or input VAT relating to all the activities carried out	VL020001-VL040001
PART VP TAX PAYMENT
	VP001001-VP014002
PART VT SEPARATE INDICATION OF OPERATIONS CARRIED OUT REGARDING END CONSUMERS AND HOLDERS OF VAT NUMBERS
	VT001001-VT022002
PART VX CALCULATION OF VAT TO BE PAID OR OF TAX CREDIT
For persons presenting the return with several forms only fill in form no. 01	VX001001-VX006002
RESERVED FOR THE COMPANIES PARTICIPATING IN THE VAT GROUP PAYMENT V	VX007001-VX008001
PART VO COMMUNICATION OF OPTIONS AND REVOCATIONS
Section 1 - Options, waivers, and revocations for the purpose of VAT	VO001001-VO015002
Section 2 - Options, and revocations for the purpose of VAT	VO020001-VO026001
Section 3 - Options and revocations for both VAT and income tax purposes	VO030001-VO035001
Section 4 - Options and revocation regarding tax on entertainment	VO040001-VO040002
Section 5 - Options and revocation regarding IRAP	VO050001-VO050002
PART VG
Section 1 - Companies participating in VAT compensation	VG001001-VG004007
Section 2 - Companies participating in the control chain but not in VAT compensation	VG005001-VG007006
Section 3 - Revocation	VG008001
PART VS
Section 1 - List of companies in the group	VS001001-VS012012
Section 2 - Summary data	VS020001-VS022002
Section 3 - Guarantees of the controlling company	VS030001
PART VV PERIODICAL TAX PAYMENTS OF GROUP
	VV001001-VV017003
PART VW PAYMENT OF ANNUAL TAX OF GROUP
Section 1 - Calculation of VAT due or input VAT for the tax period	VW001001-VW004001
Section 2 - Calculation of output or input VAT	VW020001-VW040001
PART VY CALCULATION OF VAT PAYABLE OR GROUP TAX CREDIT
	VY001001-VY006002
PART VZ DEDUCTIBLE GROUP SURPLUSES (PREVIOUS YEARS)
	VZ001001-VZ002001

Example

Here is an example for the ITCO legal entity.

1. Go to Tax > Indirect taxes > Sales tax > Sales tax codes, and set up the following sales tax codes.

   Sales tax code	Percentage	Description
   DOMP22	22	Domestic purchases at a rate of 22 percent.
   DOMS22	22	Domestic sales at a rate of 22 percent.
   EUP22	22	EU purchases at a rate of 22 percent, where the Use tax option is set to Yes.
   RC	22	Domestic sales reverse charge where the Exempt option is set to Yes.
   EUS	22	EU sales where the Exempt option is set to Yes on the Sales tax groups page.

2. Go to Tax > Setup > Parameters > General ledger parameters.

3. On the Number sequences tab, select a number sequence for the Tax communication ID reference.

4. On the Sales tax tab, on the Yearly tax communication FastTab, in the Format mapping field, select Yearly tax communication (IT).

5. Go to Tax > Setup > Sales tax > Yearly tax communication setup, and add the following lines.

   Field ID	Description	Format	Calculation	Tax	Sign	Selected sales tax code tab	Totals tab
   VE023001	22% tax base of agricultural tax transactions (art.34, c.1) and professional operations	NU	Tax transactions	Tax base	1	DOMS22
   VE023002	22% tax on agricultural tax transactions (art.34, c.1) and professional operations	NU	Tax transactions	Tax amount	1	DOMS22
   VE030003	Intra-community sales	NU	Tax transactions	Tax base	1	EUS
   VE030001	Total operations which contribute to formation of ceiling (plafond)	NU	Total		1		VE030003
   VE035007	Sales of electronic products	NU	Tax transactions	Tax base	1	RC
   VE035001	Operations with application of reverse charge	NU	Total		1		VE035007
   VE050001	Business turnover	NU	Total		1		VE023001, VE030003, VE035007
   VF014001	Taxable purchases and imports (22%)	NU	Tax transactions	Tax base	1	DOMP22, EUP22
   VF014002	Tax on purchases and imports (22%)	NU	Tax transactions	Tax amount	1	DOMP22, EUP22
   VF023001	Total PURCHASES AND IMPORTS	NU	Total		1		VF014001
   VF023002	Total PURCHASES AND IMPORTS - TAX	NU	Total		1		VF014002
   VF025002	Total TAX ON TAXABLE PURCHASES AND IMPORTS	NU	Total		1		VF014002
   VF026001	Intra-Community purchases – tax base	NU	Tax transactions	Tax base	1	EUP22
   VF026002	Intra-Community purchases - tax	NU	Tax transactions	Tax amount	1	EUP22
   VJ009001	Intra-community purchases of goods (including purchases of industrial gold, pure silver, and goods as referred to in art. 74, paragraphs 7 and 8)	NU	Tax transactions	Tax base	1	EUP22
   VJ009002	Tax on Intra-community purchases of goods (including purchases of industrial gold, pure silver, and goods as referred to in art. 74, paragraphs 7 and 8)	NU	Tax transactions	Tax amount	1	EUP22
   VJ019002	Total tax	NU	Total		1		VJ009002
   VE024001	Total TAX BASE of active operations	NU	Total		1		VE023001
   VE024002	Total TAX on active operations	NU	Total		1		VE023002
   VE026002	Total tax (VE24 +/- VE25)	NU	Total		1		VE023002
   VF037001	Admissible deductible VAT (Section 3-A)	NU	Total		1		VF014002
   VF071002	Admissible deductible VAT (Section 4)	NU	Total		1		VF014002
   VL001001	Output VAT	NU	Total		1		VJ009002, VE023002
   VL002001	Deductible VAT	NU	Total		1		VF014002

   Note

   To view the "Yearly VAT communication" form for the year 2020, and instructions for it, see Model and instructions - VAT 2020.

6. Refresh the page.

7. Post the following transactions. For example, for customer invoices, go to Accounts receivable > Invoices > All free text invoices. For vendor invoices, go to Accounts payable > Invoices > Invoice journal.

   Date	Transaction type	Amount net	VAT amount	Sales tax code	Expected field	Expected sum
   February 1, 2019	Vendor invoice	1000	220	DOMP22	VF014001 VF014002	1000 220
   February 10, 2019	Vendor invoice	800	176	EUP22	VF014001 VF014002 VF026001 VF026002 VJ009001 VJ009002	800 176 800 176 800 176
   February 2, 2019	Customer invoice	1000	220	DOMS22	VE023001 VE023002	1000 220
   February 5, 2019	Customer invoice	1500	0	EUS	VE030003	1500
   March 1, 2019	Customer invoice	500	0	RC	VE035007	500

8. Go to Tax > Declarations > Sales tax > Yearly tax communication.

9. Select Create new to create a yearly tax communication record for the previous year (2019).

10. Select the new line, select Open, and review the data that is generated for the declaration.

Fields with Total selected in the Calculation field are marked in bold.

Field ID	Value	Description (EN)
VE023001	1000	22% tax base of agricultural tax transactions (art.34, c.1) and professional operations.
VE023002	220	22% tax on agricultural tax transactions (art.34, c.1) and professional operations.
VE024001	1000	Total TAX BASE of active operations.
VE024002	220	Total TAX on active operations.
VE026002	220	Total tax (VE24 +/- VE25).
VE030003	1500	Intra-community sales.
VE030001	1500	Total operations which contribute to formation of ceiling (plafond).
VE035007	500	Sales of electronic products.
VE035001	500	Operations with application of reverse charge.
VE050001	3000 (= 1000 + 1500 + 500)	Business turnover.
VF014001	1800	Taxable purchases and imports (22%).
VF014002	396	Tax on purchases and imports (22%).
VF023001	1800	Total PURCHASES AND IMPORTS.
VF023002	396	Total PURCHASES AND IMPORTS – TAX.
VF025002	396	Total TAX ON TAXABLE PURCHASES AND IMPORTS.
VF026001	800	Intra-Community purchases – tax base.
VF026002	176	Intra-Community purchases – tax.
VF037001	396 (= 220 + 176)	Admissible deductible VAT.
VF071002	396	Admissible deductible VAT.
VJ009001	800	Intra-community purchases of goods (including purchases of industrial gold, pure silver and goods as referred to in art. 74, paragraphs 7 and 8).
VJ009002	176	Tax on Intra-community purchases of goods (including purchases of industrial gold, pure silver and goods as referred to in art. 74, paragraphs 7 and 8).
VJ019002	176	Total tax.
VL001001	396	Output VAT.
VL002001	396	Deductible VAT.

Appendix 2. Example of the Yearly tax communication setup for 2020

To download example setup for the 2020 declaration, see IVA example setup 2020. To access the link, you need to have access to CustomerSource.

1. Go to Tax > Setup > Sales tax > Yearly tax communication setup.

2. Select the Open in Microsoft Office button, and then, under Open in Excel, select Yearly tax communication setup (DEMF).

   

3. Select Download.

4. Open the downloaded file, and enable editing.

5. Copy the data from the file downloaded above and paste the data to the file that is opened, and then select Publish.

   

6. Review settings and make necessary updates. For example, set up sales tax codes that exist in the application.

7. Consider the following information. Some totals are not configured in the example and should be calculated manually using the formula specified in official guidance. These are the following totals:

   • VF037001 VAT admissible for deduction (IVA ammessa in detrazione)
   • VF071002 VAT admissible for deduction (IVA ammessa in detrazione)
   • VL032001 VAT payable (IVA a debito)
   • VL033001 VAT credit (IVA a credito)