Working with VAT

This chapter provides an overview of value-added taxes (VAT) and describes how to:

• Define VAT transaction types.

• Set up VAT authorities and tax codes.

• Define VAT countries.

• Set up VAT entities.

• Define VAT use types and apportionment.

• Establish VAT defaults.

• Manage VAT on interunit transactions.

• Load the VAT transaction table.

• Generate VAT reports.

Understanding VAT

This section provides an overview of VAT functionality and discusses:

• Taxable status and VAT rates.

• VAT reporting and accounting.

• VAT recoverability.

• VAT defaults.

• Producing VAT reports.

• VAT environment setup.

Overview of VAT Functionality

Under many different names VAT is in use in over 130 countries around the world. VAT is a governmental sales tax, a straight percentage that is added to the cost of a good or service. VAT can be inclusive, in which case VAT is included in the price of a good or service, or exclusive, in which case VAT needs to be added to the price of a good or service.

The core concept of VAT is very simple. At each step in the supply chain, VAT is calculated by multiplying the cost of the good or service by the tax rate, and charged by the seller to the buyer, while at each step in the supply chain except the last, the buyer can normally recover the VAT incurred. VAT charged by the seller and remitted to the government is referred to as output VAT, while VAT incurred by the purchaser and potentially recoverable from the government is referred to as input VAT. However, the application of the tax can be quite complex, as each country has specific requirements. PeopleSoft global VAT functionality fully supports these specific requirements.

In order to implement VAT effectively in the PeopleSoft Financials and Supply Chain applications, it is essential that you fully understand the legislation governing VAT in the applicable countries prior to implementation.

To use VAT in PeopleSoft applications, you must first set up the VAT environment. You can then create various VAT documents, such as sales orders, customer invoices, purchase orders, and vouchers. You can also record VAT for employee expense reports, asset retirements (in case of sale), bank fees incurred, and general ledger journal entries.

The VAT on these documents and transactions is calculated based upon the information you enter. For example, the VAT codes you enter determine the VAT rates the system uses to calculate the VAT amount. In PeopleSoft Purchasing, Payables, Treasury, Expenses, and General Ledger, the VAT use type you enter partly determines the amount of VAT that is recoverable.

The VAT information on all transactions and documents is loaded into the VAT transaction table by a background process and by a second process into the VAT reporting tables, from which you can create VAT returns and other VAT reports.

PeopleSoft software enables an organization to effectively administer VAT by:

• Charging VAT on invoices to customers, recording VAT collected from customers, and paying and recording VAT charged by suppliers.

• Determining what percentage of VAT paid on purchases is recoverable to offset the amount of output VAT that must be sent to VAT authorities.

• Accounting for and reporting both the VAT paid on purchases and the VAT collected on sales.

In order to do this, you must be able to enter transactions into the system, correctly calculating and recording the VAT. You must also be able to report VAT correctly on the VAT return as well as account for it correctly.

Taxable Status and VAT Rates

In PeopleSoft applications, you identify the taxable status for a given transaction by specifying the VAT applicability for a transaction line. The following system-defined values are provided:

For taxable lines, VAT must be calculated at the rate applicable to the good or service being sold or purchased, as defined by the tax authorities in each country.

Within the PeopleSoft VAT environment you define VAT rates at the VAT authority. One or more VAT authorities may be combined under one VAT code. The total of the VAT rates specified on all the associated authorities is the VAT rate applicable to that VAT code. A VAT code is applied to a transaction line, which enables VAT for that line to be calculated at the rate specified for that VAT code.

VAT Reporting and Accounting

There are three key VAT setup elements that facilitate VAT accounting and reporting: VAT codes, VAT accounting entry types, and VAT transaction types. These are used in combination by the PeopleSoft VAT report definitions to determine the information to be included on each line of the VAT return. To facilitate reconciliation between the general ledger and the VAT return, these are also used in combination to determine the ChartFields to which VAT amounts are posted.

VAT Codes

You use VAT codes to specify the rate at which VAT is calculated.

The VAT rate is frequently the key to reporting VAT because VAT amounts must often be reported separately by VAT rate on a VAT return. Therefore, the VAT code is part of the reporting definition.

To facilitate reconciliation between the general ledger and the VAT return, VAT amounts are usually recorded separately by VAT rate in the general ledger. For this reason, you define VAT accounting information (also referred to as the VAT accounting template) by VAT code.

VAT Accounting Entry Types

In addition to requiring that VAT amounts be reported separately by VAT rate, your VAT return may require that VAT amounts for certain types of transactions be reported separately. For example, you may need to report adjustments made to VAT or VAT recorded on advance payments separately.

Again, to facilitate reconciliation between the general ledger and the VAT return, VAT amounts are usually recorded separately in the general ledger for each of the different types of transactions.

VAT accounting entry types are one of the mechanisms used to enable the correct reporting and accounting of these transactions. These are system-defined values that identify the different types of VAT accounting entries that may be required (for example, input recoverable, input discount adjustments, output, output on credit memos, or output for purchases).

When you define VAT reports, VAT accounting entry types are used to identify the general types of transactions that should be included on any given line on the VAT return. For example, you might specify that input recoverable VAT amounts should be included on one line of the return while output VAT amounts should be included on another line.

For accounting purposes, you define VAT accounting information for each of the VAT accounting entry types defined in the VAT accounting template. The accounting entry types available in this template are determined by the PeopleSoft applications you have installed. Not all of the VAT accounting entry types apply to your organization, so you may simply define dummy VAT accounts for those that do not apply.

Note. This chapter includes a table that lists the predelivered VAT accounting entry types.

See VAT Environment Setup.

VAT Transaction Types

You use VAT transaction types to classify and categorize transactions at a more detailed level for both VAT reporting and accounting. These are specified for each transaction line when you enter a transaction.

You define the VAT transaction types you need for your VAT setup. PeopleSoft software also provides a set of VAT transaction types as sample data.

In your VAT reporting definition, you use VAT transaction types to fine-tune the information you want to include on a given line on the VAT return. You can do this by specifically including, or effectively excluding, certain types of transactions. For example, if you are located within the European Union (EU), you may need to report self-assessed output VAT for intra-EU acquisitions on one line in the return, while reporting self-assessed output VAT for services provided by foreign vendors on another line. For both lines on the report, you indicate that you want to include transaction lines with a VAT accounting entry type indicating VAT Output on Purchase. For the first line, you also indicate that you want to include only those transactions that are flagged with a VAT transaction type indicating an intra-EU acquisition. For the second line, you indicate that you want to include only lines flagged with a VAT transaction type indicating a service provided by a foreign vendor.

For accounting purposes, VAT accounting information defined for each given VAT accounting entry type is applicable for all VAT transaction types unless it is overridden at the more detailed VAT transaction type level. But in the cases where you need to record VAT amounts in the general ledger at the more detailed level, you can indicate that VAT amounts for a given VAT accounting entry type be posted to different sets of ChartFields defined for each specific VAT transaction type.

VAT Recoverability

Another key component you must put in place are the rules that determine whether or not input or purchase VAT may be recovered, and if so, how much.

Whether or not the VAT paid on any given purchase is recoverable depends on two factors: the nature of the purchased goods or services and how the purchased goods or services are to be used. In some countries, you cannot fully recover the VAT paid for specific items, regardless of how they are used. For example, in the United Kingdom, you are unable to recover input VAT incurred on business entertainment expenses regardless of the taxable status of your business activities. You can achieve this within PeopleSoft VAT defaults setup by defining inventory items and expense types that are not 100% recoverable.

If the goods or services are used in a taxable activity (for example, activity that ultimately results in the production of a taxable product), then VAT paid on the purchase of those goods or services is recoverable. But if the goods or services are used in a non-taxable or exempt activity (for example, activity that ultimately results in the production of a non-taxable product), then the VAT paid on the purchase of those goods or services is not recoverable. Sometimes purchased goods or services are used in a mixture of taxable and exempt activity. In this case, the VAT paid on the purchase of those goods or services would be partially recoverable.

In Canada, certain public service organizations, categorized as public service body types, are eligible to reclaim an additional portion of their input VAT that would normally be non-recoverable. This is called a rebate. Each Canadian VAT authority has established its own set of rebate percentages by public service body type to be used in the calculation of VAT rebates.

Two ways you define the usage portion of recoverability are the VAT use type and VAT apportionment.

VAT Use Type

The VAT use type identifies the end use of a given purchase by defining how much of a given activity or use is taxable, and how much of that activity is exempt, based on the tax status of the goods or services ultimately produced from those procured. In general, you specify the use type for each transaction line, thereby indicating how the purchased good or service on that line is used.

You can specify the ratio of taxable activity to non-taxable activity directly on the use type, or you can specify that mixed apportionment be used to define the ratio of taxable to non-taxable activity at the ChartField level, if you are required to calculate recoverability at a detailed level.

The VAT use type must also be linked to a public service body type in order for public service type organizations in Canada to retrieve the appropriate rebate percentage for transactions with exempt activity.

VAT Apportionment

VAT apportionment is based on the idea that the usage of a given good or service can be determined based on the business unit or the ChartFields to which the purchase or expense is charged. In other words, usage can be determined based on which business unit, department, or project might be using the purchased item.

You do not need to set up VAT apportionment information unless you are required to calculate your recoverable VAT at a very detailed level. If you elect to use VAT apportionment to calculate recoverability, you first determine a priority 1 ChartField and a priority 2 ChartField to be used in determining recoverability (for example, department or project). You may choose to define the ratio of taxable to non-taxable activity only at the business unit level. VAT apportionment information defined at the business unit level can be overridden by information defined at the more detailed ChartField level. When defining VAT information for either the priority 1 or priority 2 ChartField, you specify the ratio of taxable activity to non-taxable activity for any given ChartField value (or portion of a ChartField value—for example, all department IDs that begin with 10).

When a VAT use type that indicates VAT apportionment is specified for a line, the system looks for a match in the VAT apportionment data for the value specified first in the priority 1 ChartField, and if not found, then second in the priority 2 ChartField. If a match is still not found, the system looks for a match in the business unit. If a match is found, the system uses the ratio of taxable to exempt activity defined for that ChartField or business unit value to calculate the recovery and rebate. However, if no match is found, the system treats the line as 100% non-recoverable. For this reason, it is imperative that you specify enough VAT apportionment data so that a match is always found.

The system uses either the transaction business unit, the transaction's general ledger business unit, or the distribution line general ledger business unit to access VAT apportionment information, based on the type of business unit you define as the VAT apportionment control for the PeopleSoft Payables, Purchasing, General Ledger, Expenses, and Treasury business unit VAT drivers in the common VAT defaults table.

Calculating Recovery and Rebate

In addition to the rebate rates defined for public service bodies (PSB), and any recovery rate that may have been defined for the individual item or expense, the system uses the percentages defined for taxable and exempt activity to calculate the recovery and rebate percentages that are then used to calculate the recoverable and rebate VAT as follows:

• VAT recovery percent is calculated as ((item recovery percent/100) x (taxable activity/100)) x 100

• VAT recovery amount is then calculated as (gross VAT amount x (VAT recovery percent/100))

• VAT rebate percent is calculated as ((item recovery percent/100) x (exempt activity percent/100)) x PSB type rebate rate

• VAT rebate amount is then calculated as (gross VAT amount x (VAT rebate percent /100))

For example, for a school in Ontario, Canada, the rebate rate is 68%. If the school incurred input VAT in the amount of CAD 250.00 for an item that had been defined as recoverable at 50%, and was associated with a VAT use type with a taxable activity percent of 75%, the result would be the following:

VAT recovery percent = ((50/100) x (75/100)) x 100 = (.5 x .75) x100 = 37.5 = 37.5%
VAT recovery amount = 250.00 x (37.5/100) = 250.00 x .375 = 93.75
VAT rebate percent = ((50/100) x (25/100)) x 68 = (.5 x .25) x 68 = 8.5 = 8.5%
VAT rebate amount = 250.00 x (8.5/100) = 250.00 x .085 = 21.25

(When you calculate the VAT rebate amount, the rebate percentage is applied against the gross VAT amount, rather than the non-recoverable VAT amount, because the exempt activity percentage has already been taken into account when you originally calculated the rebate percentage.)

Let's look at another example involving the calculation of the PSB type rebate rate with a VAT code that is made up of multiple VAT authorities, each with its own individual rebate rate. In this example the rebate rate is calculated as (sum (VAT authority rebate rate x VAT authority tax rate) for each VAT authority within the VAT Code) / (sum (VAT authority tax rate) for each VAT authority within the VAT Code).

If our school had been in New Brunswick, the PSB rebate rate would be calculated as

 ((68 x 7) + (0 x 8)) / (7 + 8) = 476 / 15 = 31.73 

VAT Defaults

Based on the VAT rules that apply in different business scenarios, the system is designed to automatically populate as much VAT information about a transaction as possible. In order for the system to determine which scenario and VAT rules are applicable to a given transaction, you need to have set up various VAT defaults, and other VAT-related pieces of information.

PeopleSoft software delivers a VAT defaulting structure that:

1. Defines most of the setup structure as predefined system data, including the fields relevant to VAT, the VAT drivers such as items, products, customers, vendors, and business units for which certain VAT defaults can be specified and the transaction-specific defaulting hierarchies.

2. Stores as user data the individual factors that comprise much of the VAT rules, for example, how VAT must be calculated, when VAT must be declared, how VAT must be recorded, and whether or not purchase VAT may be recovered. Data considered to be an attribute of VAT drivers, for example customer VAT registration information, is stored on the application VAT defaults table, while all VAT default data is stored in a common VAT defaults table.

3. Contains the logic dictated by the various VAT authorities to determine the VAT information that is conditionally based on a combination of factors. For example, once all the country, VAT registration, and VAT exception data is retrieved, the system can figure out the VAT treatment. The system automatically populates as much VAT information on a transaction as possible, either retrieved from the stored defaults or derived from the logic, based on the VAT values already on the transaction.

Note. This chapter contains a table listing the VAT drivers for which you can define defaults and the associated VAT controls and defaults.

VAT Defaulting and the Organizational Structure

VAT drivers and the organizational structure affect VAT transactions:

VAT Reporting and Registration Countries

Before the system can determine the VAT treatment, it must first determine the VAT reporting country and, if applicable, the VAT registration country for the trading partner.

For sales and procurement transactions where the physical nature is goods, this is done by determining whether or not each trading partner is registered in either the ship to and/or ship from countries taking into account the rules that apply both within and outside of the European Union.

For sales and procurement transactions where the physical nature is services, the process is more complex. For freight transport services taking place within the European Union, the system again determines whether each trading partner is registered in either the ship to and/or ship from countries. For other types of services, the system looks at where each trading partner has established their business, where the service is physically performed, and where the VAT is most often liable for the type of service being provided.

If the system is unable to determine the VAT reporting country based on the applicable rules, it uses the VAT registration country designated as the home country for the VAT entity. If no country has been defined as the home country, the system displays an error message. A valid VAT reporting country must be specified in order to allow processing to continue.

The VAT reporting country is also important because it is the main driver for retrieval of VAT defaults from the VAT defaults table.

Services Place of Supply Country

The place of the supply country is another factor in determining the VAT treatment for sales and procurement transactions with a physical nature of services. This is the country in which the VAT is liable for the service. The system determines the place of supply country by looking at the countries in which both trading partners are registered for VAT, the countries in which both trading partners have established their business, the type of service being provided (freight transport or other), and where the VAT is most often liable for the type of service being provided.

VAT Exceptions

You also need to consider if the purchasing organization has been granted some type of exemption from paying VAT. These exemptions, referred to within PeopleSoft software as VAT exceptions, take the form of either an exoneration or suspension from paying VAT. An organization may be exonerated from paying VAT because of the nature of its business. For example, a government agency may be granted exoneration from paying VAT. Or, in certain countries such as France, an organization may be granted a temporary suspension from paying VAT because it regularly has a much higher level of recoverable input VAT (as opposed to output VAT) and would always receive a large VAT refund. By granting suspension from paying the input VAT, the refund is either reduced or eliminated.

You can specify if a VAT exception is applicable to a customer or VAT entity, as the purchasing organization and, if so, if that exception is an exoneration or suspension from paying VAT. If a valid exception is applicable to a transaction, the transaction uses this information to apply the appropriate default zero-rate VAT code and VAT transaction type.

VAT Treatment

Once the VAT reporting country is known, the main driver for processing VAT on sales and procurement transactions is the VAT treatment. This determines which default values should be applied, and also controls, to some extent, the availability of some VAT-related fields.

In addition, for many countries there is a requirement to report the sale and purchase of goods separately from services. To support this requirement, PeopleSoft software enables you to distinguish between transactions involving goods and transactions involving services.

In the case of a sale of goods for example, when the system determines the VAT treatment, it looks first at the combination of the ship-from and ship-to countries. The system then looks at the countries in which the buyer and seller are registered for VAT. If the ship-from and ship-to countries are the same, and in procurement, if the vendor is registered for VAT in that country, the transaction is treated as domestic. If the vendor is not registered for VAT, the transaction is treated as outside the scope of VAT. If the ship-from and ship-to countries are different, the system determines if both countries are located within the European Union. If so, the system looks at the VAT registration for each trading partner to determine if the transaction should be treated as an intra-EU sale or purchase, distance sale, domestic, or outside the scope of VAT. If either or both of the countries are located outside of the European Union, and in procurement, if the vendor is not registered in the ship-to country, then the transaction would be treated as an export or import. If the vendor is registered in the ship-to country, the transaction is again treated as domestic.

The determination of the treatment of services for the purposes of VAT varies a great deal more than for the treatment for goods. For services, when both the supplier and the customer are located in the same country and the services are physically performed in that country, the treatment is the same as the domestic VAT treatment for goods. However, the VAT treatment for services differs from the VAT treatment for goods when the services are performed by a foreign supplier (a supplier not registered in the customer’s country).

In the case of services that are performed by a foreign supplier, there are no tangible goods that can be stopped at the border. In order to deal with this, the requirement in many countries is for the customer to self-assess the VAT due on the supply of services. While this procedure is similar to that for intra-EU acquisition, there are differences. Intra-EU acquisition only applies when goods are moving between countries within the European Union and when both trading partners are registered for VAT in the European Union. The requirement to self-assess VAT on services performed by foreign suppliers exists for both European Union and non-European Union countries. Additionally, for customers in European Union countries, VAT may be self-assessed on services performed by any supplier that is not located and not registered in the customer’s country—whether or not that supplier is located in the European Union.

Part of the process of determining whether the customer must self assess the VAT is determining the place of supply of the service, as described above. For service purchases, if the VAT reporting country is the same as the place of supply country, the purchasing organization records VAT on the purchase transaction. Whether this is self-assessed or not depends on whether the vendor is also registered in the place of supply country. If the place of supply country is different from the VAT reporting country, the transaction is recorded as outside of scope. For the sales of services, if the VAT reporting country is the same as the place of supply country, VAT is charged to the customer, as applicable. However, if the place of supply country is different from the VAT reporting country, the sale transaction is treated as either outside of scope or zero-rated, based on how the VAT reporting country is defined in the VAT country table.

Within PeopleSoft software, detail VAT treatment values on the transaction lines are used for applying the precise defaults applicable to the transaction lines. Each of these detail VAT treatment values are associated with a VAT treatment group. The system tracks the VAT treatment group on the header for PeopleSoft Billing, Receivables, and Payables transactions. The VAT treatment group allows individual transaction lines to be grouped together into invoices during batch processes and validates the detail line VAT treatment values on the transaction lines.

How VAT Defaults Work

Once the VAT reporting country, VAT exception type, and VAT treatment for a transaction are known, the system is able to retrieve the defaults from the defaults table based on the VAT drivers on the transaction. In general, most of the fields contained within the VAT Controls groups boxes on the transaction entry VAT pages are populated based on values retrieved for the VAT reporting country from the defaults table.

To populate the values within the VAT Details group box on the transaction line entry VAT pages, the system retrieves the VAT applicable value from the defaults table, and uses this along with VAT exception type and VAT treatment to determine the VAT applicability for the transaction line.

Once the VAT applicability for a line is derived, that value, along with the VAT treatment, is used in combination with the transaction-specific default hierarchy to retrieve the default VAT code and VAT transaction type values respectively from the common VAT defaults table.

PeopleSoft software VAT default structure is specifically designed to hold the most frequently used value on the driver at the top of the hierarchy and exceptions to this on drivers at lower levels. Default processing on transactions looks through the hierarchy starting at the bottom and stops once a value is found.

The system also makes some initial, basic assumptions about VAT suspension and VAT recoverability that would be applicable to each line:

• Within procurement, prior to taking usage into account, all items are assumed to be 100% recoverable.

• When recording foreign VAT in expenses, all expense types are assumed to be 100% reclaimable.

• For transactions where the purchasing organization has been granted suspension from paying VAT, all lines are assumed to be subject to VAT suspension.

However, you can define exceptions to these assumptions:

• You may define any item or expense type that, due to the nature of the item or expense, is not 100% recoverable.

• You may define any expense type that, due to the nature of the expense when recording foreign VAT, is not 100% reclaimable.

• You can define any sales line identifiers (products, charge codes, discounts, surcharges,inventory item, labor type or generic identifiers), sales line identifier groups (VAT product groups, charge code VAT groups, CRM service type or inventory item group), asset classes, Treasury accounting templates, items or item categories that are not subject to VAT suspension.

  In other words, you can define certain VAT driver values that may still be taxable, regardless of whether the buyer has been granted suspension.

Note. Run the VAT 3000 report after setting up defaults to validate VAT default setup data and to expose any inconsistencies and missing default values.

Overriding VAT Defaults and Settings

In some very rare, specific cases, the system might not be able to default all VAT values as desired. Therefore, to enable the correct recording of a transaction, you can always override any default value on the transaction entry VAT pages. This is discussed in greater detail later in this chapter and in the application-specific PeopleBooks.

See Overriding VAT Defaults and Controls on Transaction Entry VAT Pages.

Producing VAT Reports

Once you enter transactions into the system, you must be able to report those transactions on a VAT return. PeopleSoft software provides processes and report definitions to enable you to do this.

VAT Environment Setup

For the system to track and process VAT, you must first set up some basic information: VAT transaction types, VAT authorities, VAT codes and their associated VAT accounting templates, VAT countries, VAT entities, VAT use types, and VAT default. Each piece builds upon the next so, for the basic setup, it’s important to implement each piece in the following order:

1. VAT transaction types.

2. VAT rates, VAT codes, and VAT accounting information.

3. VAT countries.

4. VAT entities.

5. VAT use types.

6. VAT apportionment if you have complex requirements for recovering input VAT.

7. VAT defaults.

In addition to the information you must set up, PeopleSoft software delivers multiple accounting entry types for VAT accounting and reporting with every application. You cannot add your own.

Note. You should use only one setID for all your VAT setup. If VAT codes and transaction types are set up under multiple setIDs, an invalid VAT code or transaction type could default onto a transaction entered for a business unit that is using a different setID for VAT.

This table lists the VAT accounting entry types:

Defining VAT Transaction Types

To define VAT transaction types, use the VAT Transaction Type component (VAT_TXN_CD).

This section provides an overview of VAT transaction type setup and discusses how to set up VAT transactions types.

See Also

VAT Reporting and Accounting

Understanding VAT Transaction Type Setup

VAT transaction types classify each transaction for use in VAT reporting and accounting.

The account to which VAT is posted and the box on the VAT return in which a transaction amount is included are determined by the combination of the VAT code, VAT transaction type, and the VAT accounting entry type.

In VAT report definitions, VAT transaction types are used to include (or exclude) specific types of transactions in a line of a report, such as domestic purchases or exports.

You can set up VAT accounting to apply to all VAT transaction types by default, or to apply to specific VAT transaction types.

Example: VAT for Asset Purchases

To account for and separately report VAT paid on the purchase of fixed assets, create a VAT transaction type of ASPU for asset purchase. Then define the VAT accounting information that applies specifically to the applicable VAT code, the VAT accounting entry type, and the new VAT transaction type of ASPU. Finally, update your VAT report definition so that only transactions with a VAT transaction type of ASPU appear on the asset purchases line.

Note. VAT transaction types do not control any transaction processing. They are only used to categorize transactions for accounting and reporting. For example, simply specifying EXEMPT as the VAT transaction type for your customer does not prevent your customer from being charged VAT on the invoice. Whether or not the customer is charged VAT depends on the VAT treatment, the VAT applicability of the transaction line, and the taxable status of the customer.

Page Used to Set Up VAT Transaction Types

Setting Up VAT Transaction Types

Access the VAT Transaction Type page.

Enter a description and short description.

Setting Up VAT Authorities and Tax Codes

To set up VAT authorities and tax codes, use the following components:

• Express VAT Code (EX_TAX_CD_VAT).

• Value Added Tax Authority (TAX_AUTHORITY_VAT).

• Value Added Tax Code (TAX_CODE_VAT).

• VAT Accounts by Business Unit (TAX_BU_CODE_VAT).

Use the TAX_CODE_VAT component interface to load data into the tables for the Value Added Tax Code component, and use the TAX_BU_CODE_VAT component interface to load data into the tables for the VAT Accounts by Business Unit component.

This section provides an overview of VAT authority and tax code setup and discusses how to:

• Define VAT codes using the Express VAT Code page.

• Define VAT authorities.

• Define VAT codes using the Value Added Tax Code page.

• Define VAT accounting information.

• Specify ChartFields for VAT transactions types using Express Setup.

• Enter VAT ChartFields for VAT transaction type exceptions.

• Define VAT accounts by general ledger business unit (optional).

Understanding VAT Authority and Tax Code Setup

Defining VAT rates, VAT codes, and VAT accounting involves:

• Defining VAT rates on the VAT authority tables.

• Defining VAT codes by associating the VAT authorities with those VAT codes.

• Specifying VAT accounting information for each VAT code.

Defining VAT Authorities

You create one VAT authority for each different VAT rate that you require, then associate one or more of these VAT authorities with a VAT code. The VAT rate associated with the VAT code is the total of the rates specified on all the associated VAT authorities. In most countries, you would specify only one VAT authority with a given VAT code. However, in some cases, you may want to indicate that a single VAT rate really consists of more than one component; and in this case, you would specify multiple VAT authorities for the VAT code. An example would be Canada's Harmonized Sales Tax (HST), which is comprised of a federal component of Goods and Services Tax (GST) and a provincial component for those provinces participating in the HST.

Defining VAT Codes and VAT Accounting Information

In many cases, to balance VAT account balances in PeopleSoft General Ledger to your VAT return, VAT must be accounted for separately for each VAT rate. For this reason, when you define each VAT code, you must also define the VAT accounts to be used for posting the VAT recorded at that rate. For each VAT code, VAT accounting information must be specified for each of the VAT accounting entry types. These VAT accounting entry types represent the different types of VAT accounting entries that may be required throughout the system.

When defined at the VAT accounting entry type level, the accounting information defined for a given accounting entry type applies to the combination of that VAT accounting entry type and all VAT transaction types. However, if you need to account for VAT at a more detailed level, you can override the VAT accounting information defined at the VAT accounting entry type level and, instead, define the accounting information for specific VAT transaction types.

Methods for VAT Authority, VAT Code, and VAT Accounting Setup

PeopleSoft software provides two methods for setting up VAT authorities, VAT codes, and VAT accounting information:

• Use the Express VAT Code page to define the VAT authority and VAT code at the same time.

  You use this method if you only need to define a single VAT authority for each VAT code. You simply enter the VAT rate you want associated with the VAT code and the system automatically creates the VAT authority. With this method, you specify default input VAT and output VAT accounts, and these defaults are populated to the appropriate VAT accounting entry types. At this point, you need to update only the information for individual VAT accounting entry types where the default does not apply.

• Use the VAT Authority page to define VAT authorities and then define VAT codes and associate the VAT authorities using the Value Added Tax Code component.

  With this method you set up your accounting information on the Value Added Tax Code component. You can either use the Express Setup page to specify default input VAT and output VAT accounting that the system populates to all VAT accounting entry types, or you can individually update the VAT accounting information for each VAT accounting entry type.

  If you are a public service type organization in Canada, you may also be entitled to a rebate on your input VAT. VAT rebates are calculated based on statutory rebate rates defined for each type of public service organization or Public Service Body by each Canadian VAT authority. Because VAT codes for Canada may be made up of more than one VAT authority, you define the rebate rates for each applicable Public Service Body Type using the Value Added Tax Authority component.

If you are using more than one general ledger business unit and more than one chart of accounts, you can also set up VAT accounts by VAT code and general ledger business unit. You can specify a default set of input and output VAT ChartFields, or set up exceptions for specific VAT transaction types.

Note. You should define a single setID for VAT information. This single setID enables access to only one chart of accounts when you define VAT account information by VAT code. When you define VAT accounts by VAT code and general ledger business unit, the system uses the business unit value to access the ChartFields. This way, you can define VAT accounting information in each different chart of accounts as needed.

Pages Used to Set Up VAT Authorities, Tax Codes, and Accounting Information

Defining VAT Codes Using the Express VAT Code Page

Access the Express VAT Code page.

Enter the VAT code you are adding, a description and short description

Note. If you have PeopleSoft Billing, the short description prints on the bills.

Note. After you create a VAT code using this page, use the VAT authority and VAT code setup pages to complete setup of VAT the authority and tax code and to make any adjustments. For example, for Canada, you can set rebate rates for each public service body.

Defining VAT Authorities

Access the Value Added Tax Authorities page.

Enter a description and short description.

Enter the effective date, status, and tax percent. You may add multiple rows to this page enabling you to enter new values if tax rates change.

Note. Create a different tax authority for each VAT rate used in a country.

Establishing Public Service Body Type Rebates (CAN)

For Canadian public service organizations, access the Public Service Body Type page.

VAT PSB Type (VAT public service body type)	Select the appropriate public service body type. Valid values are: Charitable, Colleges, Hospital, Municipal, Non-Profit, School, and University.
VAT Rebate Rate	Enter the percentage set by Canadian law for rebates on input (non-recoverable) VAT.

Note. You must create at least one VAT use type using the VAT Use Type component for each public service body type that you create.

Defining VAT Codes Using the Value Added Tax Code Page

Access the Value Added Tax Code page.

SetID and VAT Tax Code	Enter the setID and VAT tax code.
Percent	Displays the total percentage based on the selected tax authority or authorities entered in the Authority Information group box.
Description and Short Description	Enter a description and short description. If you have PeopleSoft Billing, the short description prints on the bills.
Authority	Select the tax authority to which this VAT code is linked. A description and the associated tax percentage display.

Note. You can associate one or more VAT authorities with a VAT code. The VAT rate associated with the VAT code is the total of the rates specified for the associated VAT authorities. For example, if you include two VAT authorities under a single VAT code, the first at 7 percent and the second at 8 percent, the rates combine for a total of 15 percent.

Usually you set up one tax authority for each VAT code. If you need to link more than one VAT authority to one tax code, add more rows.

The total percentage (at the top of the page) updates automatically whenever you add or modify VAT authorities and whenever you update the tax authority tables.

Defining VAT Accounting Information

Access the Value Added Tax Code - Accounting Information page.

Express Setup	Click to access the VAT Accounting Express Setup page to quickly set up default values for input and output VAT ChartFields. The system applies these defaults to all the applicable VAT accounting entry types.
VAT Accounting Entry Type	Lists all the VAT accounting entries that apply to the PeopleSoft applications that you installed. For example, if your installation includes only sales-related applications (such as PeopleSoft Order Management, Billing, and Receivables), you see only accounting entry types that are related to output VAT on sales. Clicking on any of the VAT accounting entry types listed opens the VAT Accounting Exceptions page on which you can define specific ChartFields for VAT transaction type exceptions. Note. You can specify a single set of ChartFields for a VAT code using the Accounting Information or Express Setup page, and the system uses those values for all VAT transaction types used with that VAT code. However, if a certain type of transaction must be reported separately, then it is easier to reconcile the VAT reports to the general ledger if these transactions are posted to separate ChartFields.
All Values	Select to display all values when you click account. Otherwise the system only displays those accounts that have been flagged in PeopleSoft General Ledger as VAT accounts.
Account	You must provide values for all the account ChartFields listed. You cannot save the page without recording an account number for each available field. If a particular account type is not applicable in your environment based on the applications installed, populate the Account field with a dummy value.
Alt Act (alternate account), Oper Unit (operating unit), Fund, Dept (department), Program, Class, Bud Ref (budget reference), Product, Project, Affiliate, Fund Affil (fund affiliate), and Oper Unit Affil (operating unit affiliate)	These are optional ChartFields that you can populate as needed.

Specifying ChartFields for VAT Codes Using Express Setup

Access the VAT Accounting Express Setup page.

Setup Input VAT	Select to specify the ChartField information to be used for recording input VAT.
Setup Output VAT	Select to specify the ChartField information to be used for recording output VAT.

Specify the appropriate ChartField values. Click OK to return to the Accounting Information page.

Entering VAT ChartFields for VAT Transaction Type Exceptions

Access the VAT Accounting Exceptions page.

Type	VAT transaction type for which you want to define an exception.
All Values	If you do not select this check box, you see only those accounts that have been flagged in PeopleSoft General Ledger as VAT accounts. Select the check box if you want to view all account values.

Enter the ChartField information you want to modify for the account type.

Click OK to save your changes and return to the Accounting Information page.

Defining VAT Accounts by General Ledger Business Unit (Optional)

Access the VAT Accounts by Business Unit page.

Delete	Click to delete all entries for this combination of general ledger business unit and VAT code. For example, if you enter a set of defaults for a general ledger business unit and later decide this is not necessary, you would access this page for the general ledger business unit and use the Delete button to delete all entries.
Express Setup	Click to access the VAT Accounting Express Setup page to quickly set up default values for input and output VAT ChartFields. The system applies these defaults to all the applicable VAT accounting entry types.
VAT Accounting Entry Type	Lists all the VAT accounting entries that apply to the PeopleSoft applications that you installed. For example, if your installation includes only sales-related applications (such as PeopleSoft Order Management, Billing, and Receivables), you see only accounting entry types that are related to output VAT on sales. Clicking on any of the VAT accounting entry types listed opens the VAT Accounting Exceptions page on which you can define specific ChartFields for VAT transaction type exceptions. Note. You can specify a single set of ChartFields for a VAT code using the Accounting Information or Express Setup page, and the system uses those values for all VAT transaction types used with that VAT code. However, if a certain type of transaction must be reported separately, then it is easier to reconcile the VAT reports to the general ledger if these transactions are posted to separate ChartFields.
All Values	Select to display all values when you click account. Otherwise the system displays only those accounts that have been flagged in PeopleSoft General Ledger as VAT accounts.
Account	You must provide values for all the account ChartFields listed. You cannot save the page without recording an account number for each available field. If a particular account type is not applicable in your environment based on the applications installed, populate the Account field with a dummy value.
Alt Act (alternate account), Oper Unit (operating unit), Fund, Dept (department), Program, Class, Bud Ref (budget reference), Product, Project, Affiliate, Fund Affil (fund affiliate), and Oper Unit Affil (operating unit affiliate)	These are optional ChartFields that you can populate as needed.

Defining VAT Countries

To define VAT countries, use the VAT Country Definition component (COUNTRY_VAT).

This section discusses how to define VAT countries.

Page Used to Define VAT Countries

Creating or Updating a VAT Country Definition

Access the VAT Country Definition page.

VAT Return ID Type	Specify the type of VAT registration ID that the system should use when filling out your VAT return. If you use your VAT registration ID, select VAT. If you use a local tax ID, select Local. You define the IDs on the VAT entity.
EC Sales List ID Type	If your organization uses the EC sales list report, specify the type of VAT registration ID that the system should use on the report. If you use your EU VAT Registration ID, select VAT. If you use a local tax ID, select Local.
Treat Exported Service As	Use to define the handling of transactions for the sale of international services. Specify the treatment as either Zero-Rate or Outside the scope of VAT.
Service For Foreign Buyer	For services supplied domestically to a foreign buyer, specify whether to treat this service as a Domestic transaction or as a deemed Export.
Record VAT on Import Goods As	For imported goods, specify whether to record the VAT as Inpt/Outpt (input/output) VAT to self-assess the VAT, or Input Only, which is assumed to be zero because the customs VAT is recorded on a third-party voucher.
Use VAT Suspension	Select if this country grants suspension from VAT to qualifying organizations.
Track VAT by Province, Track VAT by Department, or Track VAT by Bundesland	Select if this country tracks VAT at a subcountry level. Note. The exact wording of this field depends on how you defined the state label for this country on the main Country page.
VAT Default	Click this link to access the VAT Defaults Setup page. The system transfers you directly to the VAT Defaults Setup component with the applicable fields for the VAT country driver and entered VAT country. Here you can specify VAT defaults for the country. Note. This is the same page you can access using the VAT Defaults Setup component described later in this chapter.

See Also

Setting Up and Maintaining VAT Defaults

Setting Up VAT Entities

To set up VAT entities, use the VAT Entity ID component (VAT_ENTITY_ID).

Use the VAT_ENTITY_ID component interface to load data into the tables for the VAT Entity ID component.

This section provides an overview of VAT entity setup and discusses how to:

• Enter VAT entity identification information.

• Specify VAT report addresses.

• Define VAT exceptions.

• Define VAT report details.

Understanding VAT Entity Setup

VAT entities are the level within your organization at which the VAT return is filed. You can associate one or more PeopleSoft General Ledger business units with a VAT entity. The PeopleSoft Asset Management, Billing, Receivables, Purchasing, Payables, Expenses, Treasury, and, indirectly, Order Management business units associated with those general ledger business units are then VAT-enabled and all of the transactions for PeopleSoft Asset Management, Billing, Receivables, Payables, Expenses, and Treasury are available for reporting by the VAT entity.

Because the VAT entity is the entity that reports VAT, the following parameters related to filing the VAT return are recorded here:

• VAT addresses.

• VAT exceptions (exoneration or suspension).

• VAT report details

• Intrastat report details.

Here’s how you set up VAT entities:

1. Create a VAT entity.

   A VAT entity can have multiple business units associated with it, but a general ledger business unit cannot be associated with more than one VAT entity.

2. Define the address to be used by the organization.

3. Indicate if the VAT entity is exempt from paying VAT in a particular country.

   VAT entities are purchasing organizations, so they are sometimes granted an exemption from paying VAT because of the nature of their business. The exemption may be temporary or permanent. For example, most governments grant government agencies a permanent exoneration from paying VAT because the agencies are part of the government. In France, a VAT entity may be granted a temporary suspension from paying VAT if it regularly receives a large VAT refund. The government may grant a temporary suspension to reduce or eliminate the refund.

4. Define VAT report details, such as the contact information printed on reports and the process used to run reports.

Pages Used to Set Up VAT Entities

Entering VAT Entity Identification Information

Access the Identification page.

VAT Entity	Code identifying the VAT reporting entity.
Description and Short Description	Enter a description and short description.

Registration

Use this group box to specify every country where this VAT entity is registered. To add more countries, add more rows. You may only select from countries defined on the VAT Country Definition page.

GL Business Units

Use this group box to link the VAT entity to one or more general ledger business units. A VAT entity can have multiple business units associated with it, but a general ledger business unit cannot be associated with more than one VAT entity.

Note. For PeopleSoft Billing, linking a general ledger business unit to a VAT entity on this page does not automatically enable VAT for any PeopleSoft Billing business units already associated with the general ledger business unit. After you link the general ledger business unit to a VAT entity, you must go to the Billing Business Unit page to relink your Billing business unit to this general ledger business unit.

See Also

Setting Up and Running Intrastat Reports

Establishing VAT Defaults

Specifying VAT Report Addresses

Access the VAT Report Addresses page.

Note. You use this page to specify report addresses for your VAT return. These addresses can be used differently by each country. For example, in Germany, this page is used to print the address to which the VAT return is sent. Elsewhere, it is used to print the address of the reporting organization.

You can add multiple rows for different report types. Click OK to save your changes and return to the Identification page.

Defining VAT Exceptions

Access the VAT Entity - Exceptions page.

Effective Date and Status	Specify the effective date and status for each exception you enter.
End Date	Enter the date the exoneration or suspension ends, if applicable.
Exception Type	Select the type of exception. Options are: None. Exonerated: Select if the VAT entity is permanently excused from paying VAT. Suspended: Select if the VAT entity is temporarily excused from paying VAT.
VAT Certificate ID	Sometimes a government issues a certificate to show proof of an exception. Use this field to enter the VAT Certificate ID that was issued.

Note. Generally, when an organization receives a temporary suspension from paying VAT, the suspension applies until a specific date or until the organization reaches a specified purchasing limit. Any limit based on the amount of purchases is not tracked in the PeopleSoft system; you must track it manually.

Click OK to save your changes and return to the Identification page.

Defining VAT Report Details

Access the VAT Entity - VAT Reports page.

Reporting Currency	Select the currency that should print on VAT returns for this country. If reporting currency amounts have not been entered on the transaction and if the transaction and base currencies differ from the reporting currency, conversion occurs when the report extract runs.
Contact Name, Telephone, Ext, Fax Number, Vat Email Contact	Enter the applicable contact information.
Process Type	Select the applicable process type for the report.
Process Name	Select the process name for this report.

Click OK to save your changes and return to the Identification page.

Note. You cannot run a VAT report unless you specify a process type and name on this page. You define a VAT report using the VAT Report Definition component described later in this chapter.

Defining VAT Use Types and Apportionment

To define VAT use types and apportionment, use the VAT Use Type component (VAT_USE_ID) and the VAT Apportionment component (VAT_APORT).

This section provides an overview of VAT use type and apportionment setup and discusses how to:

• Define VAT use types.

• Define VAT apportionment.

Understanding VAT Use Type and Apportionment Setup

A VAT use type categorizes the use of a good or service by the tax status of the activity in which it is used—the tax status of the goods or services ultimately produced from those procured. VAT use is one of the main determinants in the recoverability of input VAT.

Note. If you are a public service organization in Canada and are eligible to receive a rebate on input VAT, you need to enter a public service body type. If more than one public service body type is applicable to your organization, at least one VAT use type is required for each public service body type selected.

You can specify the ratio of taxable activity to non-taxable activity directly on the use type, or you can specify that mixed apportionment be used to define the ratio of taxable to non-taxable activity at the ChartField level.

If you select the mixed apportionment check box, you must have completed VAT apportionment prior to entering transactions for the selection to be valid. When you select this VAT use type on a transaction, the taxable and exempt percentages apply to the calculation of recoverable and rebate VAT only if, on the transaction, either the business unit specified as the VAT apportionment control or one of the two ChartFields defined as priority ChartFields for VAT apportionment contains a value defined under VAT apportionment. If neither the business unit nor either of the ChartFields contains a value defined for VAT apportionment, the VAT recovery and VAT rebate percentages will be zero, resulting in all VAT being recorded as non-recoverable. For this reason, it is imperative that you specify enough VAT Apportionment data so that a match is always found

VAT apportionment is a mechanism that enables recoverability to be determined based on either the VAT apportionment control business unit or one of the two priority ChartFields you specify on the VAT Apportionment page and to which a transaction is posted. For each business unit, Priority 1 or Priority 2 ChartField value, you enter the percentage of activity that is taxable or exempt. The system automatically calculates the other value, so that the total of the percentages equals 100. When this business unit or ChartField value is entered on a transaction together with a VAT use type that indicates that mixed apportionment is applicable, the corresponding taxable activity and exempt activity percentages is used to calculate recoverable, rebatable, and non-recoverable VAT.

VAT apportionment setup is not required to establish your VAT environment. However, if you are unable to identify the taxable and exempt portions of a given activity for purposes of determining recoverability, it enables you to apportion that activity by general ledger business unit or ChartField. Typically, VAT apportionment is used by organizations with very complex recoverability issues. The concept behind VAT apportionment is that usage can be determined by business unit or ChartField, enabling usage to vary based on a business unit, department or project in which the purchase is to be used. VAT apportionment is not a mechanism for distributing VAT across multiple VAT accounts.

When you set up your VAT environment, you need to consider whether or not VAT on a good or service is recoverable, and if so, to what extent.

Here’s how you set up VAT rebates and recovery:

1. Define the VAT use type and indicate if a given purchase will be used in an activity that is anywhere from 100 percent taxable to 100 percent exempt.

   Specify the ratio of taxable activity to non-taxable activity directly on the use type, or you can specify that mixed apportionment be used to define the ratio of taxable to non-taxable activity at the ChartField level.

2. Define VAT apportionment if you require that recoverability be determined based on the business unit or ChartField to which the purchase or expense is being posted.

   You must set up VAT apportionment if you have defined any VAT use types as using mixed apportionment. You must also make sure that you have specified the type of business unit to be used as the VAT apportionment control for each of your VAT-enabled PeopleSoft Payables, Purchasing, General Ledger, Expenses, and Treasury business units. You set this up for each applicable business unit VAT driver in the common VAT defaults table.

   Note. If your organization does not require tracking VAT recoverability at this level, it is not necessary to set up VAT apportionment information. VAT apportionment is used by organizations with very complex recoverability issues. The concept behind VAT apportionment is that usage can be determined by business unit or ChartField, enabling usage to vary based on a business unit, department or project in which the purchase is to be used. VAT apportionment is not a mechanism for distributing VAT across multiple VAT accounts.

Pages Used to Define VAT Use Types and Apportionment

Defining VAT Use Types

Access the VAT Use Type page.

Enter an effective date, status, description, and short description.

Note. If your organization consists of more than one public service body type, each public service body type requires at least one VAT use type.

Defining VAT Apportionment

Access the VAT Apportionment page.

ChartField Priority 1	The ChartField you enter here is the first ChartField the system uses when it attempts to retrieve VAT recovery data from VAT apportionment. For example, if you define the priority 1 ChartField as Project, the system attempts to find a row in the VAT apportionment table where the priority 1 ChartField value resembles the project ID from the transaction.
ChartField Priority 2	Enter the ChartField to use in a second pass when the first attempt to retrieve VAT recovery data from VAT apportionment is unsuccessful.

You can equate ChartField priority 1 to the lowest level in the PeopleSoft control hierarchy, and ChartField priority 2 to the next highest level. Priority 1 takes precedence when found, then priority 2, while the business unit acts as the default.

Note. VAT apportionment does not use the combination of the priority 1 and priority 2 ChartFields and business unit. The system first looks for a match in the VAT apportionment data for the priority 1 ChartField value. If it finds no match, it looks for a match in the VAT apportionment data for the priority 2 ChartField. If it still finds no match, it looks for a match in the business unit.

VAT Apportionment Detail

Use this grid to specify values for the ChartFields, for one or more business units. The business units may be transaction business units or PeopleSoft General Ledger business units. The system uses either the transaction business unit, the transaction's general ledger business unit, or the distribution line general ledger business unit to access VAT apportionment information, based on the type of business unit you define as the VAT apportionment control for the PeopleSoft Payables, Purchasing, General Ledger, Expenses, and Treasury business unit VAT drivers in the common VAT defaults table.

The system looks at the transaction ChartField value, and then looks for a match. If it finds a match in VAT apportionment, it stops. If it does not find a match in VAT apportionment, it removes the last character of the transaction ChartField value and looks again for a match. It repeats this process until it finds a match or there are no more characters to remove. If it does not find a match in VAT apportionment for either the priority 1 or priority 2 ChartField, it then looks for an exact match for the business unit. If it still does not find a match, the VAT recovery and rebate percentages default to zero, resulting in all VAT being recorded as non-recoverable. For this reason, it is imperative that you specify enough VAT Apportionment data so that a match is always found

Establishing VAT Defaults

To establish VAT defaults, use the following components:

• VAT Defaults Setup (VAT_DFLT_SRCH_DTL).

• Service VAT Sub-Search (VAT_DEF_SER_SEARCH).

This section provides an overview of VAT defaults setup and discusses how to:

• Access the VAT Defaults Setup page.

• Set up and maintain VAT defaults.

• Copy VAT default setup.

• Review VAT field descriptions by VAT driver.

• Access the Service VAT Treatment Defaults Setup page.

• Set up and maintain service VAT treatment drivers.

• Copy service VAT treatment drivers.

• Validate VAT default setup.

• Override VAT defaults and controls on transaction entry VAT pages.

See Also

VAT Defaults

Understanding VAT Defaults Setup

By providing common components for establishing VAT defaults for all installed applications that process VAT transactions, PeopleSoft software provides the tax expert in your organization with the ability to see and access all VAT default setup from a shared menu. In addition, this same default setup can be accessed from the various application pages.

Note. Run the VAT 3000 report after setting up defaults to validate VAT default setup data and to exposes any inconsistencies and missing default values.

VAT Defaults

VAT defaults may be defined for many VAT drivers, and these VAT drivers make up all the levels of the defaults hierarchy. Common default records are used to store the hierarchical default data in such a way as to make retrieval of the appropriate defaults efficient. For example, a VAT default specified for an item, expense type, or product should be used before a default for a category or product group. Furthermore, within in each VAT driver defaults specified by country and state are more specific and come before defaults by country only, which in turn are more specific and come before defaults where both the country and state are blank.

You can establish VAT settings for all applicable VAT drivers using the VAT Defaults Setup component. You access the component by first selecting a VAT driver. The drivers available to you are based on the applications installed. A sub-search page opens on which you can enter more specific search criteria or driver keys. Clicking the search button opens the VAT Defaults Setup page. The default VAT data that displays is determined by the combination of the VAT driver and VAT driver keys. You then enter the required defaults and any optional defaults as needed and save the changes.

Service VAT Treatment Defaults

If you need to establish default values for the additional VAT treatment determinants specific for services, you can do this using the Services VAT Treatment Defaults Setup component. Like the VAT Defaults setup component, this component uses VAT drivers to default the values at various levels of the hierarchy. For any applicable driver, you may define the place of supply of the service or the place where the VAT is liable, whether it is the supplier's countries, customer's countries, or the place where the service is actually performed depending on the type of service. You can also specify whether the service is freight transport or other.

Understanding VAT Drivers, VAT Driver Keys, and the Default Hierarchy for VAT Defaults

The following table lists the VAT drivers and associated VAT driver keys in VAT default hierarchy sequence from most specific to least specific for the VAT Defaults component. This table also indicates which drivers also control defaults for the services VAT treatment:

Pages Used to Establish VAT Defaults

Accessing the VAT Defaults Setup Page

To access the VAT Defaults Setup page:

1. Navigate to Setup Financials/Supply Chain, Common Definitions, VAT and Intrastat, Value Added Tax, VAT Defaults.

   A search window appears.

2. Select the VAT Driver you want to maintain or set up and click Search.

   The VAT drivers listed are based on the installed applications. A VAT Default Sub-Search page appears.

3. Optionally, enter any or all of the VAT driver keys that display, the VAT reporting country, and default state or province, as applicable.

   Click Search.

4. The system opens the VAT Defaults Setup page and displays all VAT default data for the rows matching the VAT driver option selected and VAT driver keys entered.

   In addition, the system only displays the applicable VAT default fields.

Setting Up and Maintaining VAT Defaults

Access the VAT Defaults Setup page.

Note. The VAT default fields that display vary based on the VAT driver. In addition, the VAT default data is based on the VAT driver and VAT driver keys used to access this page.

Use the page to specify a value for all the required fields, for any fields requiring an overall default at the top of the VAT default hierarchy, or for any fields requiring an exception to the value specified for a VAT driver higher up in the VAT default hierarchy.

You can insert rows for any or all of the VAT driver keys as well as the VAT country or state. You can also delete any existing rows.

Note. The remaining fields on the page vary based on the combination of VAT driver and VAT driver keys. See the section on VAT fields for details of the fields that display and the VAT drivers for which they display in hierarchy order.

See Also

Reviewing VAT Field Descriptions by VAT Driver

Copying VAT Default Setup

Access the Copy VAT Defaults From page.

Copy From Search Criteria	Enter the criteria on which you want to search. You can search by setID, VAT reporting country, and defaulting state.
Search	Click to retrieve the results based on the criteria entered. The results display in the Copy From Results group box.
Copy From Results	In the Copy From Results group box, either click the link for any of the results returned to view the details of the VAT setup from which to copy on the Copy VAT Defaults Setup page. Once you have viewed the details, you can click Copy to copy the VAT setup. The system returns you to the VAT Defaults Setup page with the copied fields. Or you can select the appropriate radio button for any of the results returned and click Copy to copy from the selected row. The system returns you to the VAT Defaults Setup page with the copied fields.

Reviewing VAT Field Descriptions by VAT Driver

The following tables list the available VAT fields, field descriptions, and VAT drivers for which they display. The drivers are listed in reverse hierarchy order, from least specific to most specific. The tables also indicate on which driver the VAT field is required. Fields can be overridden at lower levels of the hierarchy as needed.

VAT Control Defaults

This table lists the fields by VAT driver that control how and when VAT is applied and calculated:

VAT Code Defaults

VAT codes specify the rate at which VAT is calculated. The following table lists the available VAT code default fields and the VAT driver for which they are available. Select the most frequently used VAT code for each VAT code field at the highest level of the VAT default hierarchy, and then specify exceptions at the lower levels of the hierarchy as necessary.

VAT Transaction Types Defaults

VAT transaction types classify and categorize transactions at a more detailed level for both VAT reporting and accounting. The following table lists the available types of VAT transaction type defaults and the VAT drivers for which they are available. Select the most frequently used VAT transaction type for each VAT Transaction Type field at the highest level of the VAT default hierarchy, and then specify exceptions at the lower levels of the hierarchy as necessary.

Accessing the Service VAT Treatment Defaults Setup Page

To access the Service VAT Treatment Defaults Setup page:

1. Navigate to Setup Financials/Supply Chain, Common Definitions, VAT and Intrastat, Value Added Tax, Service VAT Treatment Defaults.

   A search window appears.

2. Select the VAT Driver you want to maintain or set up and click Search.

   The VAT drivers listed are based on the installed applications. A Service VAT Treatment Defaults Sub-Search page appears.

   Note. The VAT drivers table provided previously in this section lists the VAT drivers on which you can specify service VAT treatment defaults.

3. Optionally enter any or all of the VAT driver keys that display, the supplier's location country, and supplier's location state, as applicable, and then click Search.

   The system opens the Service VAT Treatment Defaults Setup page and displays all service VAT treatment default data for the rows matching the VAT driver selected and VAT driver keys entered.

Setting Up and Maintaining Service VAT Treatment Defaults

Access the Service VAT Treatment Defaults Setup page.

You can insert rows for any or all of the VAT driver keys as well as the supplier's location country or state. You can also delete any existing rows.

See Also

Reviewing VAT Field Descriptions by VAT Driver

Copying Service VAT Treatment Drivers

Access the Copy Service VAT Treatment Defaults From page.

Validating VAT Default Setup

Access the VAT Validation Report page.

Run the VAT 3000 VAT Set Up Validation report to confirm that VAT defaults have been set up correctly and that defaults that are required at the highest levels in the hierarchy have been defined.

Overriding VAT Defaults and Controls on Transaction Entry VAT Pages

Access the applicable transaction entry VAT page from the PeopleSoft application. The name of the page varies based on the application. The following example shows the Invoice Line VAT Information page accessed from a voucher line in PeopleSoft Payables.

You can override default VAT settings on individual transactions from the applicable PeopleSoft application pages. For example, you can override VAT settings for a voucher line by accessing the Invoice Line VAT Information page from the Voucher component. While the fields that display on this page may vary based on the application, the page behaves in much the same way.

Note. The VAT defaults display in descending order of impact. If you change any settings on this page, you should work from the top of the page to the bottom clicking the Adjust Affected VAT Defaults button at the appropriate time or times.

Adjust/Reset VAT Defaults

A section at the bottom of the page enables you to adjust the VAT defaults based on changes you make on this page or to reset all VAT defaults.

Physical Nature

VAT Locations

The VAT location fields are populated by the applications. Values in these fields are never affected by changes to any of the VAT default fields and are never updated when you click the Change Physical Nature, Adjust Affected VAT Defaults, or Reset All VAT Defaults buttons. The possible VAT locations are:

• Bank country

• Buyer's Location Country

• Buyer's Location State

• Consumption Country

• Consumption State

• Location Country

• Location State

• Seller's Location Country

• Seller's Location State

• Service Performed Country

• Service Performed State

• Ship From Country

• Ship From State

• Ship To Country

• Ship To State

• Ship To VAT Rgstrn Country

VAT Registrations

The fields for VAT registration defaults include:

• Reporting Country

• Default State

• Bank, Customer, or Vendor Registration Country

• Bank, Customer, or Vendor Registration ID

• Exception Type

• Exception Certificate ID

Any changes you make to these values with the exception of the exception type and exception certificate ID affect all VAT default settings if you click the Adjust Affected VAT Defaults button after making changes.

If you change the exception type only the VAT transaction type and VAT code defaults are adjusted if you click the Adjust Affected VAT Defaults button.

VAT Controls

If you change the default setting in the Calc on Advance Payments field and click the Adjust Affected VAT Defaults button, the system updates all VAT default settings.

Changes to any other VAT control fields do not affect other VAT defaults. Also, if you change any of the following fields and click the Adjust Affected VAT Defaults button, your changes will be lost if you have also changed fields that affect the VAT control fields:

• Calculate at Gross or Net

• Recalculate at Payment.

• Calculation Type

• Declaration Point

• Declaration Date

• Accounting Entry Type

• Rounding Rule

• Non-Recovery Charge

• Use Type

• Apportionment Control

• Recovery Source

• Rebate Source

• Reclaim Percent

• Include Freight

• Include Miscellaneous

• In Reporting Currency

• No VAT Receipt

• Prorate Non-Recoverable

• Allocate Non-Recoverable

VAT Treatments

Examples

These examples illustrate the behavior of the VAT defaults:

• Example 1

  The user overrides the Calculate at Gross or Net field and clicks the Adjust Affected VAT Defaults button. The system does nothing, because Calculate at Gross or Net is a VAT control field that does not affect any other VAT defaults. The user then overrides the vendor registration country and clicks the Adjust Affected VAT Defaults button once more. This time the system adjusts all the VAT defaults except the change to the vendor registration country. This includes the Calculate at Gross or Net field which the user must override again, if necessary.

• Example 2

  The user overrides the vendor registration country and clicks the Adjust Affected VAT Defaults button. The system adjusts all VAT defaults except the change to the vendor registration country and vendor registration ID. The user then overrides the place of supply settings and clicks the Adjust Affected VAT Defaults button once more. The system adjusts all VAT defaults except the service type, place of supply, vendor registration country, and vendor registration ID.

See Also

VAT Defaults

Managing VAT on Interunit Transactions

To manage VAT on interunit transactions, use the Business Unit Interunit Option component (VAT_BU_OPT) and the Business Unit Interunit Pairs component (VAT_BU_PAIR).

This section provides an overview of VAT on interunit transactions and discusses how to:

• Specify accounting for VAT on interunit transactions by setID.

• Handle exceptions to the accounting for VAT on interunit transactions for general ledger business unit pairs.

Understanding VAT on Interunit Transactions

PeopleSoft software enables you to manage how you account for and report VAT on interunit transactions, including those that cross legal entities and VAT jurisdictions.

VAT accounting entries are divided into the following three types, or accounting entry groups:

• Non-recoverable input VAT.

• Other input VAT.

• Output VAT.

Note. Output VAT recorded on purchases is included with other input VAT to ensure that the input VAT and associated output VAT are recorded together.

When entering transactions in PeopleSoft Payables, Expenses, and General Ledger, the transactions as a whole are associated with a general ledger business unit. However, you can enter a different general ledger business unit on the distribution line.

You use general ledger business unit source options to specify where you want the different types of VAT accounting entries to be posted. You can specify the general ledger business unit to be used for each of the three types of VAT accounting entries for interunit transactions as follows:

• Distribution Line GL Business Unit.

  This allows the specified type of accounting entry to be posted to the general ledger business unit on the associated distribution line.

• Transaction (header) GL Business Unit.

  This allows the specified type of accounting entry to be posted to the general ledger business unit associated with the transaction as a whole.

In addition, there are two ways to set up the general ledger business unit source options:

• By setID.

  This approach allows the same set of options to be shared by multiple general ledger business units. If you are using legal entities, you are able to set up separate sets of options for transactions that take place between two general ledger business units within the same legal entity and for transactions that take place between two general ledger business units that are in different legal entities. If you are not using legal entities, the options you specify are applicable to all types of interunit transactions.

• By specific pairs of from and to general ledger business units.

  The options defined for a specific pair of general ledger business units always override the options defined at the more general, setID level.

  Note. It is only necessary to define options at this level for exceptions to what you defined at the setID level.

Interunit Example

On the Procurement Accounting Controls, Expenses Business Unit, and General Ledger Business Unit pages, you are able to specify if non-recoverable VAT should be prorated and posted to the expense distribution ChartFields. If you have specified that non-recoverable VAT is to be prorated, then the non-recoverable VAT is always posted by the system to the Distribution Line GL Business unit along with the expense, regardless of the general ledger business unit option you define for non-recoverable VAT.

This example illustrates how an Italian business unit might generally record costs on behalf of business units in other VAT jurisdictions and how an exception in the handling of VAT for another Italian business unit is accomplished.

If an Italian business unit incurring costs for other business units must record, account for and report VAT, but the actual expense must be recorded in the other business units, you specify on the VAT Business Unit Option page for the Italian setID that the Transaction (header) GL Business Unit is used for each of the three different VAT accounting entry groups. This results in all the VAT accounting entries being created for the Italian business unit allowing the reportable VAT to be included on the VAT return for the Italian VAT entity. Only the actual expense is accounted for as an interunit entry between the Italian and other business units.

However, if business units other than the Italian business unit are generally required to record, account for, and report the VAT, you specify that the Distribution Line GL Business unit is to be used for each of the different VAT accounting entry groups. This enables you to create all the VAT accounting entries for the other business units, and, if appropriate, report them on the VAT return for the other VAT entities.

If the requirement is that the recoverable VAT be recorded by the Italian business unit, but any non-recoverable VAT be passed to the other business unit as part of the cost, you specify that the Transaction (header) GL Business unit be used for Other Input VAT, while the Distribution Line GL Business unit be used for Non-Recoverable Input VAT. In this case, the accounting entry for the recoverable VAT is created for the Italian business unit, while the accounting entry for the non-recoverable VAT is created for the other business unit. The recoverable VAT is then available to be reported on the VAT return for the Italian VAT entity.

Because the options you select on the VAT Business Unit Option are intended to govern how the VAT on most but perhaps not all interunit transactions is handled for the business units comprising the setID, you can define exceptions for transactions between specific business units on the VAT Business Unit Pairs page. For example, if an Italian business unit generally records, accounts for, and reports VAT on transactions with business units in other countries, but this is not intended to be the case for another Italian business unit, you can create the exception between the two business units by specifying the Distribution Line GL Business Unit as the source for the to Italian business unit.

Pages Used to Manage VAT on Interunit Transactions

Specifying Accounting for VAT on Interunit Transactions by SetID

Access the Business Unit Interunit Option page.

SetID	Specify how a business unit records each of the three types of VAT accounting entries by setID. Enter the setID that represents one or more general ledger business units that will be accounting for VAT on interunit transactions in the same way.
InterEntity GL Business Unit Source and IntraEntity GL Business Source	If you set up the system to use legal entities, you can specify the business unit source options separately for InterEntity and IntraEntity transactions. If the system is not using legal entities, you specify these options for interunit transactions.
Distribution Line GL Business	Select this option for each VAT accounting entry type that you want posted to the general ledger business unit at the distribution line level. For example, within PeopleSoft Accounts Payable this is the general ledger business unit specified on the distribution line.
Transaction GL Business	Select this option for each VAT accounting entry type that you want posted to the transaction, or header business unit. For example, within PeopleSoft Accounts Payable this is the general ledger business unit associated with the voucher as a whole. In other words, it is the general ledger business unit with which the vouchering Payables business unit is associated.

Defining Accounting Treatment for Interunit Transactions for GL Business Unit Pairs

Access the Business Unit Interunit Pairs page.

From GL Business Unit	Enter the business unit for which you are creating the exception or exceptions.
To GL Business Unit	Enter business units that are exceptions. For example, if the from general ledger business unit generally records, accounts for, and reports VAT on interunit transactions involving VAT, you can specify that this be done instead by the to general ledger business unit when you select Distribution Line GL Business unit for each of the VAT accounting types. You can add multiple exception business units.
Distribution Line GL Business	Select this option for each VAT accounting entry type that you want posted to the general ledger business unit at the distribution line level. For example, within PeopleSoft Accounts Payable this is the general ledger business unit specified on the distribution line.
Transaction GL Business Unit	Select this option for each VAT accounting entry type that you want posted to the transaction, or header business unit. For example, within PeopleSoft Accounts Payable this is the general ledger business unit associated with the voucher as a whole. In other words, it is the general ledger business unit with which the vouchering Payables business unit is associated.

Loading the VAT Transaction Table

This section provides an overview of VAT transaction table load, lists prerequisites, and discusses how to:

• Set up the run request for the VAT Transaction Loader process (FS_VATUPDFS).

• Run the VAT Transaction Loader process.

Understanding VAT Transaction Table Load

The VAT transaction table stores the detailed transaction information required for VAT reporting and is the primary source of information for all VAT reports. VAT transaction information is loaded into the VAT transaction table from PeopleSoft Payables, Billing, Receivables, Expenses, Treasury, General Ledger, and Asset Management through a background process. For each product, the transaction loader uses a VAT transaction source definition to determine what information should be selected from which tables. These VAT transaction source definitions are delivered with the PeopleSoft system.

To keep the VAT transaction table current, you need to periodically run the VAT Transaction Loader background Application Engine process (FS_VATUPDFS) that updates the VAT transaction table using VAT transaction information from PeopleSoft applications.

Before you run the process, the PeopleSoft application that is the VAT transaction source must have VAT-applicable transactions. You may also need to run application-specific processes to prepare the VAT transactions for the VAT transaction table.

See the PeopleSoft application PeopleBook for more information on whether you need to do this for the applications you have installed.

Prerequisites

The following application processes must run on transactions before the transactions can be picked up the by the VAT Transaction Loader:

• PeopleSoft Payables

  Voucher Posting and, if applicable, Payment Posting.

• PeopleSoft Receivables

  Receivable Update.

• PeopleSoft General Ledger

  Journal Edit and Posting.

• PeopleSoft Expenses

  Post Liabilities.

• PeopleSoft Treasury

  Automated Accounting.

• PeopleSoft Billing

  Finalization and Currency Conversion.

• PeopleSoft Asset Management

  Calculate Depreciation and Create Accounting Entries.

Page Used to Load the VAT Transaction Table

Setting up the Run Request for the VAT Transaction Loader Process (FS_VATUPDFS)

Access the VAT Transaction Loader Rqst page.

Use this page to establish the parameters including run frequency and time for running the VAT Transaction Loader to update the VAT transaction table for the applicable entities, products, and business units.

Before setting up your run request or run requests, evaluate when you want to run the loader and for what VAT entities, products, and business units.

You can include multiple entities on a request by adding new rows and specifying the applicable product and business unit settings.

Note. Create additional run control IDs as needed for different combinations of VAT entities, VAT transaction sources, and business units.

Running the VAT Transaction Loader Process

When you run the Transaction Loader process, the steps the process takes depends on the PeopleSoft application selected as the VAT transaction source. This table outlines the processing steps for each transaction source:

Note. In PeopleSoft Asset Management if you retire an asset in Asset Management and pass the information onto Billing, the VAT Transaction Loader does not get the VAT information from Asset Management but from the bill created in PeopleSoft Billing. However, if the retirement transaction remains in PeopleSoft Asset Management, the VAT Transaction Loader picks up the VAT information from Asset Management.

PeopleSoft Asset Management and VAT

Although VAT is recorded when you retire an asset, PeopleSoft Asset Management does not generate a financial document such as a VAT invoice. You have the option to send an asset retirement transaction to PeopleSoft Billing where an invoice is automatically generated. In this case, no VAT information is loaded into the VAT Transaction Table from PeopleSoft Asset Management. The invoice transaction is picked up by the VAT Transaction Loader from PeopleSoft Billing instead.

However, you also have the option to not send the retirement transaction to Billing and to not have the invoice generated automatically, In this case, if you want to manually record the sale of a retired asset in PeopleSoft Billing and PeopleSoft Receivables, you may record the VAT applicable to that sale a second time. In this case, you must ensure that the VAT does not get reported on your VAT return twice.

To avoid this, instead of using the VAT recorded in PeopleSoft Asset Management to generate your VAT return, you may prefer to simply use that information to assist you in entering the invoice for the sale of the asset in PeopleSoft Billing or PeopleSoft Receivables. In this situation, you may not want to copy VAT into the VAT transaction table for PeopleSoft Asset Management. (When you run the Transaction Loader, do not select PeopleSoft Asset Management as a VAT transaction source.)

If you do not want to include PeopleSoft Asset Management VAT transactions on your VAT return, assign a specific VAT transaction type to your asset retirement transactions. Then you can either exclude that VAT transaction type on any line in the VAT report definition or include it on an additional unprinted line on the VAT report definition.

Generating VAT Reports

To generate VAT reports, use the VAT Report Definition component (VAT_RPT_ID1) and the VAT Return XML Data (AUS) component (VAT_XML_NODE).

This section provides an overview of VAT reports, lists prerequisites, and discusses how to:

• Review predefined VAT report definitions.

• Create or update a VAT report definition.

• (AUS) Maintain XML meta-data for the e-BAS report.

• Run the VAT Report Extract (VAT1001).

• Run reports to be used for producing your VAT return.

• Run VAT reconciliation reports (VAT2000).

• Create VAT audit file extracts.

• (AUS) Run the electronic return for the e-BAS (VAT0650).

• (ITA) Generate Italian sales and purchases VAT registers.

Understanding VAT Reports

So that you can comply with government regulations, PeopleSoft software provides VAT reports for you to use in the preparation of your VAT returns.

PeopleSoft software delivers:

• Predefined VAT returns for Australia, Belgium, Canada, France, Germany, Italy, Luxembourg, Spain, the Netherlands, Switzerland, and the United Kingdom.

  Prior to running these reports in your system, you must first modify the report definitions by specifying the information you want to print on each of the lines, based on the VAT codes and VAT transaction types you have defined in your system.

• A VAT transaction SQR report (VAT0150.SQR).

  This report lists all VAT transactions for the selected period by customer, vendor, and other sources.

• A Crystal report for the EC Sales List.

  This report lists all sales made to customers in a foreign country within the EU.

• VAT reconciliation reports.

• VAT audit file extracts and reports for tax auditing purposes.

Creating and Defining VAT Reports

You can use any of the predefined Crystal reports or the SQR transaction report by linking each report to your VAT entity. You can also modify or write a VAT Crystal or SQR report and run the modified report by linking it to the VAT entity.

Creating a VAT report is a three-step process:

1. Create a report definition that includes the VAT codes and VAT transaction types you created, and the system-defined VAT accounting entry types.

   You must create a VAT report definition for each type of VAT report you want to generate.

2. Run the VAT Report Extract process that applies your VAT report definitions to the VAT transaction data in the VAT reporting tables.

   This process selects transactions from the VAT transaction table and stores VAT transaction information in the VAT reporting tables. You run the Report Extract for a specific VAT entity and country, indicating the type of report you want to produce as well as various date selection criteria. Each time you run the Report Extract process, a report instance is created. The transactions in the VAT transaction table that were selected by the Report Extract process are all linked to this report instance.

3. Run and print VAT reports for a VAT entity.

To define VAT reports:

1. Determine what information is required on your VAT report on a line-by-line basis.

   You might start by using an empty official tax return form to determine which information you want to print on each line of your VAT report.

2. Specify, for each line on your report, a combination of values for the VAT codes, VAT transaction types, and VAT accounting entry types for which you want the VAT report to print transactions.

3. Create or modify a corresponding Crystal or SQR report.

There are three different types of reports that can be produced:

• VAT returns

• EC sales lists

• Other

Any given VAT transaction can only be selected once to appear on a report with a report type of VAT return and once to appear on a report with a report type of EC Sales List. However, prior to printing these types of reports as final reports, the report instance can be deleted, enabling you to select the VAT transactions again for that report type. A VAT transaction can be selected to appear on any number of reports with a report type of Other.

When you print a report, you select the report instance for the report you want to produce. You have three print options:

Reporting VAT on Third-Party Vouchers

When creating a VAT report definition that includes recording VAT on third-party vouchers confirm that the transactions are included correctly and only once.

Both the voucher lines from the original supplier invoice and the third-party voucher are loaded into the VAT transaction table. Confirm that the VAT transaction type that is specified on the third-party voucher differs from the value that the original invoice specifies. This allows you to distinguish between the two lines and to determine which one to include on any given line in the VAT return.

You can set up defaults to allow different VAT transaction types to default onto your transactions automatically. You can do this by defining a specific set of default VAT transaction types for each third-party vendor.

Prerequisites

Before you can generate and run reports:

• If you are generating reconciliation reports and audit extracts, the following PeopleSoft applications must have generated accounting transactions: PeopleSoft Receivables, Billing, Payables, Expenses, Asset Management, Treasury, and General Ledger.

  Additionally, some products must have generated accounting entries prior to running the VAT Transaction Loader. Refer to the specific PeopleSoft application PeopleBook for details on whether this is required for the particular application.

• The VAT Transaction Loader process must have loaded VAT transactions into the VAT transaction table.

Common Elements Used in this Section

Pages Used to Generate VAT Reports

Reviewing Predefined VAT Report Definitions

Although you can create your own VAT returns and reports using the VAT Report Definition component, PeopleSoft software also delivers predefined VAT returns for a number of countries. The following table lists the predefined VAT report definitions provided with PeopleSoft software:

Creating or Updating a VAT Report Definition

Access the VAT Report Definition page.

Enter a description, short description, and setID.

Note. For the predelivered VAT Returns defined by PeopleSoft applications, it is important to note that the line number on the report definition corresponds to the line numbers or box numbers on the appropriate Crystal layouts. Depending on the layout for each country, those numbers are not necessarily sequential, and the numbers do not necessarily start with one. Before you make changes to the report definition, print a sample report to get an understanding of line numbers and box numbers, if applicable, and the information required on each line of the VAT Return.

Defining Data Selection Criteria for Each Report Line

Access the VAT Report Definition - Line Criteria page.

For each VAT line you define line criteria.

The key element in defining your VAT report is the selection of the combinations of VAT code, VAT accounting entry type, and VAT transaction type for which you want VAT amounts or taxable amounts included on your report.

Depending on your field selection, you can define the following:

You may want to start by specifying the types of VAT transactions that should be included on that line. Select the VAT accounting entry type to indicate the general types of VAT entries that should be selected, such as VAT Output (VO) or VAT Input (VI). Select the VAT transaction type to include, or effectively exclude, specific types of VAT transactions, such as domestic purchases or exports. Once you have determined the types of transactions that should be selected for a given line, select the VAT code if you only require VAT information for specific VAT rates to be reported on that line.

By combining these selection criteria, you can fine tune the information that appears on each line. For example, you may have specified that transactions with VAT accounting entry types of VO (VAT output) and VOP (VAT output on purchases) should be selected. You might then further specify that, for those VAT accounting entry types, only transactions with VAT transaction types that indicate domestic sales and services provided by foreign vendors should be selected. On another line, you can again specify the selection of transactions with VAT accounting entry types of VOP, but this time also indicating that only transactions with VAT transaction types that indicate intra-EU acquisitions should be selected. By not specifying any VAT codes for these lines, you are enabling the selection of transactions with all VAT codes that meet the other specified selection criteria.

Warning! When reporting VAT included on third-party vouchers, you must be very careful to make sure that these transactions are included correctly—and are included only once.

See Understanding VAT Reports.

(AUS) Maintaining XML Meta-Data for the e-BAS Report

Access the VAT Return XML Tags page.

Enter an effective date and status.

Maintaining XML Meta-Data

Viewing or Updating Meta-Data Details

Access the XML Node Detail page.

XML Source	Select the appropriate XML source from the following options: Source: XML detail. None: No value specified. Array: Cells G1 to G20 of the BAS (Business Activity Statement). Constant: Constant value specified. Field Val (field value): Permits specification of a field from the VAT_RPT_INST1 table. Runtime: Value defined on the Electronic Return run request page on which you define parameters for generating the e-BAS flat file. This page is described later in this section.
XML Detail	Enter a description for the XML source you are defining. For example, if you select Array as the XML source, use the XML detail to describe the placement of the source in the cells.
XML Attribute and XML Detail	Enter the XML attribute according to the XML source you select. For example, if you select Field Val as the XML source, enter the XML ID that describes the type of cell. Enter the XML Detail according to the XML source you select. Again, for example, if you select Field Val as the XML source, enter the field number of the report.

Running the VAT Report Extract (VAT1001)

Access the VAT Report Extract page.

Here you set up your run requests for extracting data in preparation for printing your VAT report.

Enter a description and short description.

You are now ready to run the extract process.

Each time you run the VAT report extract process, the system creates a report instance. The transactions in the VAT transaction table are linked to this report instance. You select the report instance you want to use when you are preparing to run your VAT report on the VAT Reports page.

Running Reports to be Used for Producing Your VAT Return

Access the VAT Reports page.

Print As	Select from the following values: Draft: You can reprint the report as many times as necessary. Final: Print a final report. Reprint: If you have printed a report as final, you can reprint the report as many times as needed.
VAT Entity and Country	Specify a VAT entity and country for the report. The system retrieves only those report instances run for this entity and country combination.
Refresh	Click to retrieve the report instances created by the VAT Report Extract process for the specified entity and country combination. The report instances display in the VAT Reporting Results group box.
VAT Reporting Results	Displays the report ID, a description of the report, the report date, report type, and the instance for each report extract that has been run for this VAT entity and country combination.
Select	Select this check box for the report instance for which you want to print the VAT report.
Details	Click to access the Detail page to view details for a report instance.

Note. For VAT returns and EC sales lists, any given VAT transaction can be selected only once for a report. However, prior to printing these types of reports as final reports, the report instance can be deleted, enabling you to select the VAT transactions again for that report type. For other types of reports, this restriction does not apply.

Once you have reviewed the instance details and are satisfied that you have selected the correct instance, you are now ready to run the VAT report.

Viewing Report Instance Details

Access the VAT Reports - Detail page.

Report ID and Description	ID and a description of the report definition used for the report extract.
Report Date and Report Type	Date of the report extract and type of report extract run.
Process Instance	Process instance for the report extract assigned by the system. The VAT transactions are linked to this process instance.
Run Date and Time	Date and time on which the report extract was run.
Report Transactions From and Report Thru Date (report through date)	Date range of the transactions selected for the report extract.
Country	Country for which the report extract was run.
VAT Registration ID	Associated VAT registration ID for that country which will print on the report.
VAT Reporting History	Lists the printing history.
Transactions Not Selected	Lists the transactions that are not included in the report and why. Use this section to associate transactions not selected with the report instances to prevent those transactions from being treated as exceptions for future reports. The transactions may include: Transactions that exist in the VAT transaction table for the date range entered on the extract page, but do not meet the criteria specified by the VAT report definition. This does not necessarily indicate that the transactions are in error. For example, transactions indicated as outside of the scope of VAT may exist in the VAT transaction table, but printing them on a VAT return may not be required. Note. You can prevent transactions that are not required on a VAT return from being specified as exceptions in the first place by creating an additional line on your VAT report definition to pick up these additional transactions. In this way, the transactions do not show up as exceptions, but also do not appear on the report. Within the Report Exceptions group box, is the Select All button that enables you to select the Associate with VAT Report check box on all the lines within the Transactions Not Selected group box. You can select the Associate with VAT Report check box to link the transaction to the report instance, and prevent the transaction from being selected during future runs on the VAT Report Extract. This prevents the transaction from appearing on future reports as an exception
No Exchange Rates Available	Lists the missing exchange rates needed to calculate the VAT amounts displayed.

Note. The Transactions Not Selected and No Exchange Rates Available fields only display if there are exceptions.

If a transaction has not been selected in error or if no exchange rate exists, you must correct the problem that caused the error, delete the report instance, and rerun the VAT report extract. This enables all the previously selected transactions plus the transactions flagged as exceptions to be selected for the report.

Running VAT Reconciliation Reports (VAT2000)

Access the VAT Reconciliation Rpt page.

VAT Report Type	Select from the following: Account Balance Reconciliation: For a specified range of VAT-applicable accounts and dates, allows comparison of the amount of expected VAT to the amount of VAT that was actually posted for VAT transactions that have been recorded in PeopleSoft Payables, Receivables, Billing, Asset Management, Expenses, Treasury, and General Ledger. This report also allows the total amount of posted VAT reported for each VAT account to be compared to the GL balance for that VAT account. Account/VAT Account Recon (Account/VAT Account Reconciliation): For a specified range of accounts and dates, lists the taxable basis amounts as well as corresponding VAT amounts calculated from VAT transactions that have been posted by PeopleSoft Payables, Receivables, Billing, Asset Management, Expenses, Treasury, and General Ledger. Taxable Basis Reconciliation: Verifies that the VAT Basis amounts stored on the VAT Transaction Table, multiplied by the appropriate VAT percentage, is equal to the actual VAT amount also stored on the same table. VAT Transaction Reconciliation: Provides an overview of VAT transactions generated by PeopleSoft Payables, Receivables, Billing, Asset Management, Expenses, Treasury, and General Ledger applications and verifies if those transactions have been reported on a VAT Return Report. Zero VAT Justification: Illustrates why no VAT was collected or paid.
Report Detail	If you are running the Taxable Basis Reconciliation, the VAT Transaction Reconciliation report, or the Account Balance Reconciliation report, select if you want to view the report as Summary or Detail. If you select Detail, the report prints one line for each VAT transaction. If you select Summary, VAT information is printed on an aggregated level. Note. The Zero VAT Justification and Account/VAT Account Recon reports are always detail reports.
Print Exceptions Only	For the Taxable Basis Reconciliation report, the VAT Transaction Reconciliation report, or the Account Balance Reconciliation report, select to display discrepancies. This table lists the content for each of these reports if printed as an exception:

You are now ready to run the VAT reconciliation report.

See Also

PeopleSoft Financials Global Reports

Creating VAT Audit File Extracts

Access the VAT Audit File Extracts page.

Select the VAT extract type from the following:

You are now ready to run the VAT audit report.

See Also

PeopleSoft Financials Global Reports

(AUS) Running Electronic Return for the e-BAS (VAT0650)

Access the Electronic Return page.

Note. The VAT report for the BAS (Business Activity Statement) must be printed as final before the data can be extracted into the flat file for submission to the ATO (Australian Tax Office).

You are now ready to run the electronic return.

See Also

PeopleSoft Financials Global Reports

(ITA) Generating Italian Sales and Purchases VAT Registers

Access the VAT Register ITA page.

VAT Reporting Entity and VAT Reporting Country	Select the VAT entity and country combination for which you want to generate the report.
VAT Register Type	Select from the following: VAT Purchases Register and VAT Sales Register.
Journal Code	Select the journal code.
Document Type	Use to select the document type to use for the selected journal code. This is optional.
Exchange Rate Type	Select the type of exchange rate you want the system to use to convert VAT amounts into the reporting currency.
From Document Date and To Document Date	Use to specify the date range for the documents to be included.
Detail or Summary	Select whether to run a Detail or Summary report.

You are now ready to run the report.

See Also

PeopleSoft Financials Global Reports