The VAT Code table setup allows the definition of all the parameters that are necessary to manage the transactions with VAT. The setup refers to:
- VAT due or recoverable
- Transaction amount recorded as net, gross, or VAT amount at 100% (Customs VAT)
- Freely definable applicable VAT rates
- Freely definable account in which VAT must be recorded
- Special rounding off for each code
- Definable grouping and totaling method
The VAT Codes table has a Base view and a Complete view (see top of the table hereunder). The difference between the two is the fact that the Complete view presents several columns that are not available in the Base view. These columns serve to accommodate some specific options.
How to calculate
The parameters indicated in the VAT Codes table are being used to calculate the VAT of the individual transactions. The parameters established in the VAT Codes table cannot be changed in the transactions. This modality guarantees that the VAT calculations are correct and uniform.
Please note: if the values of a VAT Code, which has already been used in the transactions, are being modified, the changes are not active immediately; in this case it is necessary to activate the Recheck accounting command (Account1 menu -> Recheck accounting). When the VAT Codes table is being modified, the program invites the user, through a message in the Info window, to execute a complete recalculation as a precaution.
The following table refers to the codes being used according to the Swiss legislation:
Detailed description of the columns
In the following columns, insert the following data:
- Group: a code or number that identifies the group to which the code belongs. In the example we have inserted 1 for the sales, 2 for the purchases, T for the total.
- VAT Code: the code to identify and carry forward the VAT code in the transactions.
- Description: a text for the description of the VAT Code or the group.
- Entering 1, the VAT code isn't displayed in the autcomplete list (Transactions table), but can still be used;
- Entering 2, the VAT code is disabled and cannot be used.
- Gr: code of the "Group" in which the row has to be added.
- Gr1: In the image of the table above, the grouping codes representing the numbers for the Swiss VAT declaration are being shown.
- Gr2: code for additional groupings.
- Due VAT:
If the word Yes is being inserted, this means that the VAT is at debit (due to the State)
If the cell is empty, this means that the VAT is at credit (recoverable)
- Amount type: indicates how the software considers the transaction amount:
0 (or empty cell) with VAT/sales tax (the transaction amount is considered VAT included)
1 = without VAT/Sales tax (the transaction amount is considered VAT excluded)
2 = VAT amount (the transaction amount is considered the VAT amount)
- % VAT: VAT code percentage
- Non ded.: if, for a VAT code, it is not possible to deduct the full 100%, enter the non deductible percentage here (example 100%)
- VAT% on gross: is usually being left empty. In special cases, the word "Yes" has to be inserted only if the VAT percentage has to be applied on the gross amount (VAT included) and not on the taxable amount.
- VAT account: the account on which the calculated VAT is being automatically.
In the File and Accounting properties (File menu), a general account, that will be used as the VAT account, can be defined.
It is also possible to set up a specific account for every individual VAT code.
- Round Min: minimum value for rounding, to be used only in particular cases. By preference, the rounding indicated in the basic data of the accounting (f.i. minimum rounding value 0.05) is being used.
- Don't warn: there are particular transactions that the software could interpret as mistaken, but which, in reality, are correct. In order to avoid for the software to signal error messages, insert the word Yes for the code that is concerned.
When the transactions with VAT are inserted, by applying the VAT Code in the VAT Code column, the software calculates automatically all the amounts related to the VAT and transfers them in the VAT account.
Rechecking of the accounting file
When rechecking the accounting file, if transactions are not locked, the program will reload the VAT parameters assigned to each code. If a VAT code setting has been changed, the change will be taken into account in the corresponding transactions columns (that cannot be edited by the user).
For this reason, when editing the VAT table, the program suggests to operate a full accounting recheck.
Adding a new percentage
When a new percentage is added, a new row has to be added; in the new row, insert the data of the new VAT code with the new percentage, while paying attention to insert the correct grouping. Don't change a code that has already been used in the transactions.
By creating groups with multiple totaling levels, the user can obtain the totals that are necessary for the VAT declaration.
In the VAT report, by activating the option Use own grouping scheme, the software calculates the totals exactly as indicated in the sequence of the indicated groupings in the VAT Codes table.
The groupings are being used to obtain totals for groups of transactions, for example, the totals for all exportations or importations.
Related document: Import VAT codes