VAT Maintenance Business Rules

Your business may have situations when you need VAT to be calculated using vat codes other than the default for the current item being sold. This use of a non-standard Vat code may be needed in specific situations, so it is necessary to set up a 'VAT Rule' for each of these different situations.

This BusiPro facility for VAT Maintenance Business Rules allows you to define precisely under what circumstances an order or invoice should calculate VAT not using your standard Vat Code, but another, alternative one.


How the Vat Rules are implemented in BusiPro

Within BusiPro a number of different vat codes will be set-up to cater for various accounting requirements. The vat rules are maintained to automatically change between various vat codes depending on the exact circumstances of the current sale.

You set-up VAT rules against VAT code / Country combinations and say that "if this particular set of criteria is matched for an order or invoice, then change to a different VAT code or Country"

When you put an order line on with a particular VAT code, if the order matches one of your VAT rules, then the Vat code for the order will switch immediately and automatically to the one your have defined. VAT will then be calculated correctly according to rates on the new code.

While the set-up of the VAT rules needs to be done carefully and with understanding, these rules make the day-to-day user operation of VAT calculations extremely quick and accurate.

 

To set up VAT rules for your business

The rules should be set up on a VAT code.

A rule should be put in for each country on the rate that it applies to.

Parameters & Lists > Accounts > VAT Codes.

Once there, right click to Search in the Hot Area for the 'standard' rate that you are going to use for when your business rule for VAT might apply.

Double click on the 'VAT code' column to reveal two tabs: Main and Rules.

Click on the second tab called 'Rules'. If there are already any rules set up, they will appear in the grid below.

To add a new rule, click the New Button the left panel.

There will appear a screen inviting you to put in the name of your rule, and the paramters for it:-

 

and below, there is a list of the criteria you might like to use for your rules:-

 


To define the criteria for your rule, you must use the parameters 'AND', 'OR' between rules.

 

Example 1.

If you wanted to say:

- IF - I have the VAT registration number of a company
- AND - the country of the company I am selling to - IS NOT - equal to UK
- AND - the company I am selling to is in the VAT area of Europe"

Then you would use these elements from the list:

- IF - C01 [company VAT reg present]
- AND - C02 [the country of the company] != [is not equal to] UK
- AND - C03 [the company VAT area] = [is equal to] EU

then the resulting rule would look like: C01 AND C02 != [UK] AND C03 = [EU].

This particular example is the Reverse Charge VAT rule for a UK vat registration.

The outcome on your screen would look like this:

 

On the right hand side of the screen, you give the instructions of which VAT code or Country you want the program to use if the rule is true for your order. So in the box 'Vat Code to' put the code for your EC Vat Rate.

Example 2

A different example of a business rule for VAT might be if you wanted to say:

- IF -the charity flag of a company I am selling to is ticked
- AND - the country of the company I am selling to is UK

Then you would use these elements from the list:

- IF - C04 [company charity flag set]-
- AND - C02 [the country of the company] = [is] UK

then the resulting rule would look like: C04 AND C02 = [UK]. Because this second example happens to be the Charity VAT rule for a company based in the UK selling to a charity also based in the UK, and because charities are zero-rated for VAT, then in the box on the right of the screen the VAT code that this rule would need to point to would be the one you have set up for zero-rated VAT. The screen might look like this:

These are just two examples of how to set up VAT rules for situations where, in certain circumstances, your business rules require VAT to be calculated on a different Vat code from the default. With the criteria available it will be possible to set up any number of rules.

 

Use of countries in the criteria

Note that the text for the countries in the rule is the country code from your list of countries. The text for the Vat area is the code that you have used within each countries set-up (Parameters & Lists > Marketing Database > Countries).

 

Items which follow the VAT rules of a specific country

It is possible to specify that sales of an item must use the VAT calculations for a particular country and a particular Vat code for that country.

By default, when you set up an item, the item 'VAT Country/Code' will be the VAT country and default VAT code on the Event Set-Up screen, and in many cases, this will be correct.

However, there may be particular items that you will sell that must follow the VAT calculations of a country which is not the country where the event is taking place. You can specify which country and VAT code an item should follow when you set up the item. This information will be used whenever you make a sale of this item.