Exact Globe+

Creating and maintaining tax codes

Menu path

System ➔ General ➔ Countries ➔ Tax codes

Introduction

It is possible for you to create multiple tax codes to be used in Exact Globe Next.

What version are you using?

The information in this document is applicable to product update 410 and higher. If you have versions lower than this, certain features explained here will not be applicable.

How do I create tax codes?

In the Tax codes screen, click New.
Define the fields.
Click Save.

Keep in mind: Fields with the “!” icon are mandatory.

How do I edit tax codes?

In the Tax codes screen, define the search criteria.
Select a tax code in the overview.
Click Open.
Make the change(s).
Click Save.

Fields

VAT code

Type a unique value-added tax (VAT) code for the new VAT. You cannot edit this code the next time you want to maintain the VAT.

Description

Type the description of the VAT.

Click this to type the description of the VAT code in foreign languages. The foreign languages are set in System ➔ General ➔ Settings ➔ General settings, under Descriptions in list boxes.

Transaction type

Select the transaction type for the VAT. You can select Purchase, Sales, or Both if you want to use the VAT for both purchase and sales transactions.

Purchase VAT return type

If you select Purchase under Transaction type for the VAT, you can select either Goods, Services, or Investments at Purchase VAT return type.

Percentage

Type the percentage of the VAT.

Percentage non-deductible VAT

Type the percentage of the non-deductible VAT if it is available to you. This option is enabled by the Non-deductible VAT field in the General ledger settings tab on the System settings page.

VAT % description

Type the description of the percentage of VAT imposed.

VAT cash system

Select this check box if you want to use the VAT code based on the VAT cash system. Based on the VAT cash system, VAT is calculated upon payment and reconciliation of the invoice and not when the invoice is entered.

If you are creating a new tax code by selecting the VAT cash system, and VAT charged check boxes, the following validations will apply:

If the VAT cash system check box is selected, the VAT charged check box will be enabled. You can select either of the check boxes.
If the VAT cash system check box is selected, the VAT to be paid account, and VAT to be claimed account fields will be enabled depending on the option selected at Transaction type. If Sales is selected at Transaction type, the VAT to be paid account, and VAT to pay account fields will be enabled. Otherwise, the VAT to be claimed account, and VAT to claim account fields will be enabled if Purchase is selected. If Both is selected, the VAT to be paid account, VAT to pay account, VAT to be claimed account, and VAT to claim account fields will be enabled, and mandatory.
If Both is selected at Transaction type, the VAT cash system and VAT charged check boxes will be enabled.
If Sales is selected at Transaction type, the VAT charged check box will be enabled if “0.00” is defined at Percentage. However, if both the VAT cash system, and VAT charged check boxes are selected, the VAT to be claimed account, VAT to pay account, VAT to be claimed account, and VAT to claim account fields will be enabled, and mandatory. The VAT type field will be disabled, and by default set to Excluding.
If Purchase is defined at Transaction type, the VAT charged check box will be enabled if “0.00” is not defined at Percentage. However, if both the VAT cash system, and VAT charged check boxes are selected, the VAT to be claimed account, VAT to pay account, VAT to be claimed account, and VAT to claim account fields will be enabled, and mandatory. The VAT type field will be disabled, and by default set to Excluding.
Once the VAT code is saved, the Transaction type field will be disabled.
If the VAT charged check box is selected, the VAT type field will be disabled, and by default set to Excluding. Furthermore, the VAT to pay account, and VAT to claim account fields will be enabled. If the VAT cash system check box is selected, the VAT to be claimed account, and VAT to be paid account fields will be enabled.

If you are editing an existing cash based VAT tax code, the following validations will apply:

The VAT charged check box will be enabled if Purchase is defined at Transaction type. The Transaction type field will still be disabled.
If the VAT charged check box is selected, Excluding will be defined at VAT type, and this field will be disabled.
The VAT to be claimed account, VAT to claim account, VAT to be paid account, and VAT to pay account fields will be enabled, and mandatory.

If you are editing an existing VAT charged tax code, the following validations will apply:

The VAT cash system check box is enabled, and Purchase will be defined at Transaction type, and this field will be disabled.
If the VAT cash system check box is selected, the VAT to be claimed account, VAT to claim account, VAT to be paid account, and VAT to pay account fields will be enabled, and mandatory.

Note: The VAT cash system check box will only be available if you have selected the Flexible VAT system check box under the Entry section when you define the general ledger settings. For more information, see General ledger settings.

General tab

VAT type

Select the VAT type you want to use. You can select Excluding, Including, or N/A (not applicable). If you select Excluding and the VAT percentage is 19% and invoice amount is EUR 100, the amount of tax charged will be 19% of the invoice amount which is EUR 100. Hence, the tax amount will be EUR 19. If you use the VAT type Including and the VAT percentage is 19% while the invoice amount is EUR 100, the 19% portion of tax amount is already included in the invoice amount. Hence, the tax amount is EUR 16 (19% x 100 / 119%).

Note: VAT type is disabled if the VAT percentage is 0.

VAT charged

If you have selected Purchase or Both at Transaction type, you can select the VAT charged check box to indicate that the VAT is charged for purchase transactions. The VAT charged is only applicable for purchase transactions, and for sales transactions, it is only applicable for VAT 0%. If this check box is selected, by default, the VAT type will be set to Excluding. For more information on the VAT charged validation, refer to the VAT cash system field.

Note: For the Spanish legislation, the VAT charged option will remain disabled for the Sales transaction type with a zero VAT percentage.

VAT 0% exemption

Select the VAT 0% exemption check box if VAT exemption is applicable.

Extra duty percentage

Type the extra duty percentage charged if it is applicable. This function may be disabled as it depends on the legislation of a country.

Note: If the legislation of a country allows extra duty percentage, you need to select the Extra duty check box under the Entry section in System ➔ General ➔ Settings ➔ General ledger settings to enable the Extra duty percentage field. However for certain countries like Belgium and Spain, the Extra duty percentage field is enabled, and is not dependent on the Extra duty setting in System ➔ General ➔ Settings ➔ General ledger settings.

VAT to be paid account

Type or select the general ledger account to be used for recording the VAT amount during sales invoice entry if the VAT code used is based on the VAT cash system. This account functions as a suspense general ledger account. Upon payment and reconciliation of the invoice, the general ledger account entry will be reversed to the VAT to pay account.

Note: This function is enabled if you select the VAT cash system check box and select Both or Sales at Transaction type.

VAT to pay account

Type or select the general ledger account to be used for recording the VAT payable.

Note: This function is enabled if you select Both or Sales at Transaction type.

Non-deductible VAT account

Type or select the general ledger account to be used for recording the non-deductible VAT amount. This option is enabled by the Non-deductible VAT field in the General ledger settings tab on the System settings page.

VAT to be claimed account

Type or select the general ledger account to be used for recording the VAT amount during purchase invoice entry if the VAT code used is based on the VAT cash system. This account functions as a suspense general ledger account. Upon payment and reconciliation of the invoice, the general ledger account entry will be reversed to the VAT to claim account.

Note: This function is enabled if you select the VAT cash system check box and select Both or Purchase at Transaction type.

VAT to claim account

Type or select the general ledger account to be used for recording the VAT to claim.

Note: This function is enabled if you select Both or Purchase at Transaction type.

Creditor

Type or select the creditor account which handles the VAT. Usually, this is the tax authority.

Payment

Select the frequency of tax payment. Three options are available which include Monthly, Quarterly, or Yearly.