This article describes how Value Added Tax (VAT) is processed in a Receivable Transaction. Please also refer to Receivable Transaction for detailed information on Receivable Transaction processing.
Where VAT is applicable, there are two options / methods of processing available when entering a Receivable Transaction:
The Amount entered in the Document Amount field is EXCLUDING VAT (i.e. VAT is to be added to the document amount entered),
The Amount entered in the Document Amount field is INCLUDING VAT (i.e. VAT is already included in the document amount entered)
Where the Document Amount entered is EXCLUDING VAT, theappropriate tax class in the picklist in the Tax Class (Tax Added to Doc Amt) field is to be selected. When a tax class is selected in this field, the tax is calculated and added to the document amount. This class is derived from the Tax Locations program.
Where the Document Amount entered is INCLUDING VAT, theappropriate tax class in the picklist in the Tax Class (Tax Incl in Doc Amt) field is to be selected. When a tax class is selected in this field, the tax is calculated and deducted from the document amount. This class is derived from the Value Added Tax (VAT) Class program.
NOTE A user cannot select a tax class from both the Tax Class (Tax Added to Doc Amt) and the Tax Class (Tax Incl in Doc Amt) fields. Either field is to be selected where VAT is applicable.
Other than the above, the rest of the Receivable Transaction process remains unchanged.
