ULTIMATE DATABASE LTD

VAT Codes

• Go to Parameters & Lists > Accounts > VAT Codes in the main menu bar.
• To view existing cost codes, enter or Search in the Hot Area for the cost code and hit return.
• A list of the countries which have been set up as VAT registered are listed in the grid. To add a country to the list, it must be ticked VAT registered, for more information see Adding Countries.
• You can edit the details of the countries that are VAT registered by clicking on the country and clicking the Edit Button. This allows you to enter a value for the VAT rate and also an EC Rate In/Out, This relates to purchases made from other EU countries. When a purchase is made from another EU country the amount of Vat that would have been paid is recorded for use in your Vat Returns.
• To set up a new VAT code, enter a code in the hot area of up to two characters.
• Hit return and click on Yes to Add New VAT Code?
• Enter a description of the VAT code.

Tick this box if the vat code is a standard rated code. The normal VAT rates of each of the countries that you have set up as VAT registered should be entered into the column called 'rate'.

It is likely that there will be two 'standard' rate VAT codes: one to be used for items for which a reverse change never applies, and another for use for those items when a reverse charge may apply. For the VAT code where reverse changes may apply, be sure to set up your VAT rules (see VAT Maintenance Business Rules).

A typical standard VAT Code might look like this:

Tick this box if the vat code is being created for outside scope use such as wages etc.

Tick this box if you are creating a Vat code for Exempt use such as Export outside of the E.U.

Check this box to create a code for E.C. import/exports involving reverse charge VAT. Be sure to fill in 'EC rate in/out box' with the standard VAT rates for each of the countries you have set up as registered for VAT. By filling in this column, when a sale/purchase is made from another EU country and the reverse charge rule applies, this will show the amount of VAT that would otherwise have been paid. You can use then use this in your VAT Returns.

This VAT code will be called automatically from the Standard VAT Code when the reverse change rule applies.  Please see VAT Maintenance Business Rules.

Be aware that if a reverse charge is being applied, your invoice to your customer must state "This service is subject to reverse charge".  Please see VAT Code Text for Invoices

A typical EC Reverse Charge VAT Code screen might look like this: