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EU VAT Process

Introduction

The European Union value-added tax (or EU VAT) is a tax on goods and services within the European Union (EU). Different rates of VAT apply in different EU member states and it is dependent on the products or services involved in the transactions. With the EU VAT system there is also obligation for Intrastat and ESL (European Commissions Sales Lists) reporting. Intrastat report is for trade statistics of EU member countries while ESL is for tax compliance within EU community.

VAT transactions captured in IP1 system allows you to generate Intrastat/ESL reports as per requirements of the EU member states.

View Business rules

Business rules

The following business rules have to be setup to handle EU VAT process. Business rules for EU VAT process must be setup with support from Iptor IP1 consultants. It is critical to understand the setting of control files and how it works. Control files must be setup correctly for the system to operate as intended. Any changes to the control files setup should be addressed cautiously and in consultation with Iptor IP1 consultants.

Note This document does not cover customised setup tasks of specific companies. Deviations from this setup should be covered by setup tasks written by individual companies.

 

Control files
TMSDS/VTO015-A Transaction definition

This control file maps transaction types and conditions to defined values (flow of goods, nature of transaction and sales/cost value) required for the Intrastat/ESL report.  The value column determines whether the sales value or cost value is used on the report.
VTO015-B VAT Mapping to Warehouse

Tax registration code for a warehouse; this is only required if a company has warehouse/s in different EU countries.
VTO015-C European Community Countries

List of EU countries for Intrastat and ESL reporting.
VTO015-D ESL Goods/Services item classification

Holds the override item classification for goods and services classification.
VTR015-A Defaults for VTR015

Define the default destination for IFS File/folder for the generated Intrastat report. Company/period is appended to the file name.
VTR018A Defaults for VTR018

Define the default destination for IFS File/folder and the Monthly/Quarterly default for the generated ESL report. Company/period is appended to the file name.
TMSDS/IC-VTESL ESL report Goods/Services

This is the override item classification for the Intrastat/ESL report.

Other setup

Different VAT rates apply in different EU member states. To setup Tax registrations for a company, VAT rules and rates see Work with VAT and Work with VAT Regions

Procedure

It is your responsibility to ensure that you understand this procedure before performing the following tasks.

Note Deviations from this procedure should be covered by procedures written by your company. Before performing any tasks please ensure all the business rules are set-up accordingly.

 

 Process Steps
Run VAT detail/summary report (VTR005/VTR010) VAT detail/summary reports displays sales and VAT data by date by customer for different VAT tax registrations for the selected company/period.

  1. Select menu Other Modules>Other Regions>VAT>VAT Reports.
  2. Click menu item VAT Detail Report for a detail report or VAT Summary Report for a summary report.
  3. Enter the Period/Company selection and click OK. The generated report will got the spool file.
Repopulate Intrastat & ESL data for reporting (VTO015) This process selects sales transactions between EU countries from the VAT transaction file (VTTRA00P) and repopulates Intrastat and ESL data file (VTINT00P) for the selected Company/Period. It should be run before running Intrastat/ESL report.

  1. Select menu Other Modules>Other Regions>VAT>VAT Reports.
  2. Click menu item  Refresh Intrastat/ESL data.
  3. Enter the Period/Company to refresh the data for. Any Intrastat and ESL reports run after the refresh will pick up the latest data.
Run Intrastat reports VTR015/VTR016 The Intrastat report is a statistical report on the movement of goods within EU countries.

  1. Select menu Other Modules>Other Regions>VAT>VAT Reports.
  2. Click menu item VAT Intrastat Report for a summary report or VAT Intrastat Detail Report for a detailed report.
  3. Enter the following information for the summary/detailed report and click OK.
Summary Detail
Period – the period of goods movement you wish to report on. Period range – you can run the detail report for a single period or a period range.
Company – company code for the Intrastat reporting company. Company – company code for the Intrastat reporting company.
Country – country of dispatch of the goods and services. Dispatch country – country dispatching the goods and services.
IFS Folder/File – destination folder for the generated Intrastat summary report. The default values are defined in control file TMSDS/VTR015-A. Arrival country – country receiving the good and services
Commodity – this is the item tariff code. Can be entered to select sold items for a specific tariff code.
Nature of transaction – A = transfer, B=return
Terms of delivery – this is the buying method for the item/order. Buying methods are defined in control file TMSDS/LC-BMTH.

The following information is displayed on the Intrastat report.

  • Process number
  • Line number
  • Sub Line number
  • Dispatch and arrival country
  • Nature of transport
  • Terms of delivery/Buying method
  • Customer and supplier code
  • Item description
  • Commodity code
  • Weight, value, quantity and UOM

Both the summary/detailed reports will go to your spool file. The summary report will also go to the IFS Folder/file as specified.
Run ESL Report (VTR018/VTR019) ESL report lists sales data for sales to VAT registered companies within EU countries (from one EU country into another Eu country).  ESL reporting is for taxation purposes. Summary report can be run to submit to the tax authorities, while the detail report can be used for auditing purposes.

  1. Select menu Other Modules>Other Regions>VAT>VAT Reports.
  2. Click menu item ESL Quarterly list for a summary report or ESL Detail Report for a detailed ESL.
  3. Enter the following information for the summary/detailed report and click OK.
Summary Detail
Monthly/Quarterly  Monthly/Quarterly
Period Period
Company Company
Country Country
IFS Folder/File – destination folder for the generated Intrastat summary report. The default values are defined in control file TMSDS/VTR018-A. Customer From/To
Shipping country From/To

The following information is displayed on the ESL report.

  • Customer’s name
  • Customer’s VAT registration number
  • Country code
  • Item (in the detail report)
  • Item description (in the detail report
  • Total value of the transactions reported
  • ESL indicator (0=Goods, 2=Triangular, 3=Services). Triangulation is where a trader in one EU state sells goods to a trader in a second EU state and the goods however are delivered to a trader in a third EU state.

Both the summary/detailed reports will go to your spool file. The summary report will also go to the IFS Folder/file as specified.
Generate VAT GL journal/Post VAT journal to GL (VT0010) VAT GL journals can be manually generated with the option to generate a VAT excel  report for checking before posting. See VAT GL Journal Generation.
Generate VAT GL journal excel (VTR020) You can generate an excel listing for all or posted journals by company/group, period and document date range.

  1. Select menu Other Modules>Other Regions>VAT>VAT Reports.
  2. Click menu item VAT GL Journal Generation Excel.
  3. Enter the selection details as required and click OK.

 

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