Country Specific VAT
Specific tax rates pertaining to countries can be configured within Khaos Control that allow the Sales Invoice to default to the tax rate for the country the goods are being delivered and invoiced to. Using another country's tax code removes the VAT from the UK VAT return.
Tax rates must be setup against each country and then defined against the stock types they are applicable to. A tax rate setup against a stock item will take precedence over the stock type tax rate. In addition, the country specific tax rates can be applied to the delivery charge if applicable.
- The SP Ledger posting mechanism links the selected Tax Rate chosen on a SP Ledger item to the associated Tax Country, as a result of this association, any SP Ledgers posted using a Country Tax Rate, will be posted to the Tax Return associated with that country. For example, a customer wishes to post the Irish Import VAT received from their courier for importing goods to their Irish VAT return. They would select their Irish Tax Rate, enter the tax amount and post the SP ledger purchase. This new transaction would then appear on the Irish Vat Return , when the
[ Accounts | Tax ]screen is filtered on the "Republic of Ireland" in the country filter.
- The VAT will show in the system nominal Tax on Sales.
- Only invoices to customers that have a delivery and invoice address in the same country that has VAT rates assigned to it will default to the country specific VAT rates.
- Modifications have been made to ensure Country VAT recorded sales are included in the EU figures making up Box 6 and Box 8 on the UK VAT Return, see 018897: UK Vat EU sales figures Box 6 and Box 8.
- These figures do not affect the VAT payable figures (box 5) at all; only the statistical figures reported to HMRC about EU Sales.
- These changes are not retrospective and will only apply to newly posted transactions.
- As of 8.188 onwards the reference / customer information for transactions covered by this development will show the customer information rather than blank.
- As of 8.189 onwards, customers can opt out of this information being recorded using the option Country VAT EC Sales Excluded in
[ System Values | Accounts | General ]. This option will disable this development for all *new* transactions only, any previously generated transactions will still be recorded and reported upon. The changes for the development were made upon the advice of HMRC and only affect the “sales” figures reported to HMRC , they do not affect the values being paid / credit to HMRC in UK Tax.
- The option VAT based on delivery address in
[ System Values | Accounts | General ]has an impact on which part of the VAT Tax Return the tax will appear on, see the table below for details.
Note: We are looking to make changes to this area to allow more flexibility with regards which address the VAT is based on; invoice, delivery or customer's country.
|See point 2 above|
Before you can start using Country Specific VAT Rates you will need to configure the system, see How To: Setup Country Specific VAT.
Using Country Specific VAT
For information about using Country Specific VAT, see How To: Use Country Specific VAT.
Committing a Tax Return when using Country Specific VAT
For information about committing a Country Specific VAT Return, see How To: Commit a Tax Return when using Country Specific VAT.
Changing Country Specific VAT Rates
For information about updating the country-specific VAT rates if they have been changed, see How To: Update Country Specific VAT Rates when the Rates have been Changed. Do not just change the rate as this will not work.
To ensure that the correct VAT rate is shown on customs invoices, you MUST tick the Force Country VAT in
[ System Data | International | Countries ].