Use non-deductible VAT

This article explains how to use and report non-deductible VAT.

Create a purchase invoice with non-deductible VAT

1. Select the icon, enter Purchase Invoices, and then select the related link.

2. Select New to create a purchase invoice, and enter the appropriate information on the invoice header.

3. In the Lines section, create a new line of any type, based on the VAT business posting group and the VAT product posting group where you configure non-deductible VAT.

4. In the Quantity and Direct Unit Cost fields, enter appropriate values.

   If you selected the Show Non-Ded. VAT In Lines checkbox on the VAT Setup page, the amounts in the Non-Deductible VAT Base and Non-Deductible VAT Amount fields are calculated based on the Non-Deductible VAT % field on the VAT Posting Setup page.

5. Post the invoice.

Create a purchase order with non-deductible VAT

1. Select the icon, enter Purchase Orders and then select the related link.

2. Select New to create a purchase order, and enter the appropriate information on the document header.

3. In the Lines section, create a new line of any type, based on the VAT business posting group and the VAT product posting group where you configure non-deductible VAT.

4. In the Quantity and Direct Unit Cost fields, enter appropriate values.

   If you selected the Show Non-Ded. VAT In Lines checkbox on the VAT Setup page, the amounts in the Non-Deductible VAT Base and Non-Deductible VAT Amount fields are calculated based on the Non-Deductible VAT % field on the VAT Posting Setup page.

5. Post the purchase order.

Adjust rounded VAT amounts before document posting

If VAT amounts aren't rounded in the same way in your environment and in the external accounting system (the original invoice document), you can adjust the VAT amount before you post the document. To make this adjustment, follow these steps before you post the document.

1. On the Action Pane, select Statistic.

2. If you're working with a purchase invoice, follow these steps:

   1. On the Lines FastTab, select the VAT amount or non-deductible VAT amount.
   2. Set the values that you need from the original document, and then close the Purchase Invoice Statistics page.

3. If you're working with the purchase order, follow these steps:

   1. On the Invoicing FastTab, select No. of Tax Lines to open the VAT Amounts Lines page.
   2. Select the VAT amount or non-deductible VAT amount that you want to correct.
   3. Enter the values that you need from the original document, close the VAT Amount lines page, and then close the Purchase Order Statistics page.

To use adjustments of VAT amounts, you must enable the adjustments. On the General Ledger Setup page, in the Max. VAT Difference Allowed field, enter the maximum allowed VAT amount for correction. Then, on the Purchases & Payables Setup page, select Allow VAT Difference.

You can adjust the values of the VAT Amount and Non-Deductible VAT Amount fields. The value of the Deductible VAT Amount field is the result of these two values. The amount that you enter in the Non-Deductible VAT Amount field can't be more than the amount that you enter in the VAT Amount field. The Max. VAT Difference Allowed field on the General Ledger Setup page works independently for deductible and non-deductible VAT amounts on statistic pages when you want to adjust VAT amounts.

Important

You can't use non-deductible VAT on the prepayment invoices.

See also

Financial Management

Set Up Calculations and Posting Methods for Value-Added Tax

Set up Non-deductible VAT

Design details about non-deductible VAT

Report VAT to Tax Authorities

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