Check customer VAT details
In order to use VAT code X you need to make sure your customers' VAT registration details are complete otherwise you can't enter an invoice or order.
Navigate to the Debtors Tab.
Click Customers.
In the Record section, click VAT.
Check the details are complete.
Flag the stock, price or text line as a service
Also if you are entering an order onto through the Sales Order Module (Selling) ensure you flag the stock, price or text line as a service.
Navigate to the Stock Control tab.
Click on the Stock Records button.
Click on the EC Info button, found in the Record Section. A new window appears.
Tick the Box labelled Service.
Check the price record
This can also be checked with thePrice Record, which can be found by doing the following:
Navigate to the Purchasing Tab.
Click on the Price Records button.
Click on the EC Info button, found in the Record Section. A new window appears.
Tick the Box labelled Service.
Once again this can also be done from the Sales Order Section.
Useful information
Transactions
VAT Codes X and Y apply to invoices and credit notes for EU VAT registered customers and suppliers and EU VAT debit VAT journals only.
Sales
When selling services for which EU VAT reverse charge accounting is applicable, and the supply is subject to VAT, ensure:
VAT Code X is selected for the transaction.
When selling services for which EU VAT Reverse Charge accounting is applicable, and the supply is not subject to VAT, ensure:
VAT Code Y is selected for the transaction.
Sales Orders/Credit Notes
When entering a transaction for an EU VAT Registered Customer for which EU VAT Reverse Charge accounting applies, you should select a stock or price item that has been set as a Service. This ensures the Service flag will be set as on. You can also enter a text line and flag it as a Service.
For stock and price items, the Service flag is not editable from the transaction.
In selecting a text item, the Service flag is editable.
The Service flag sets a VAT Code default for the transaction:
Change the VAT code to Y where EC VAT Reverse Charge accounting is applicable, and the supply is not subject to VAT.
If required, change the VAT code to something other than X or Y. The following message appears: ’Are you sure you want to use a VAT code of type n for the supply of services to an EU VAT Registered Customer?’. Select OK to continue or No to cancel.
Note: the VAT amount is displayed as zero on SOP transactions and no VAT value is calculated. If you try to change the VAT amount you receive a warning message: ’The VAT amount must be zero for VAT codes of type X or Y’. Any amount entered is returned to zero.