VAT service is one of the most important areas of each company’s activity. Below, a number of functionalities offered by Dynamics NAV in the field of VAT are presented.

VAT Declaration

The VAT declaration is a tool that is helpful in preparing a VAT declaration for the needs of settlement with the tax office. In Microsoft Dynamics NAV, the billing period for VAT returns has been changed from the accounting period to the VAT period. Thanks to this, it is possible to generate a declaration for a selected, defined VAT period, regardless of the accounting period in which the given transaction was recognized in the books.

VAT-EU Declaration

The VAT-EU declaration is a summary information on intra-Community transactions in a given period. The necessity of submitting this report results from the provisions of the VAT Act. ERP software has a tool to facilitate and automate the preparation of data for EU VAT declarations.

Unrealised VAT

Unrealised VAT is a functionality used when the amount of VAT has to be suspended, due to the fact that it is not possible to settle it at any given time. It is particularly important in servicing sales invoices. Pursuant to the provisions of Polish law, VAT on the corrective invoice of sales may be deducted only after receiving confirmation from the recipient of the receipt of this document. Hence the need to suspend the amount of VAT for the period between the issue of the sales invoice and the confirmation of receipt by the recipient.

Not Deductible VAT

There are cases in which input VAT can not be deducted in 100%. Therefore, only part of the VAT amount can be shown in the VAT register. The remaining part should be added to the purchase amount and booked in costs. In the case of purchase of a stock or fixed asset, the un-calculated part of the VAT amount is added to the purchase value of the inventory or fixed asset. Then it is posted as part of the acquisition cost.

VAT Settlement Sheet

The VAT settlement sheet is a tool used to reconcile VAT before it is settled with the tax office. Thanks to this functionality, the user of Microsoft Dynamics NAV obtains full control over the activities in VAT records, such as: translation and implementation of VAT, and change of VAT obligation date.

Detailed VAT Entries

Functionality Detailed VAT entries allow for more accurate service and greater control over the change in the value of VAT to be settled in a given period. The general idea is similar to other detailed records in the system, such as detailed records of the book of purchasers and detailed records of the book of suppliers. This means that in the Detailed VAT entries, the system stores information on changes in the value of VAT entries in the form of separate entries. The amounts in the VAT records are the sum of the amounts registered in the Detailed VAT entriesrelated to the given VAT.

Unrealized VAT and Date of VAT Obligation

The Microsoft Dynamics NAV system allows you to service unrealized VAT. Unrealized VAT is calculated when you create an invoice. However, it is not due or realized until the invoice is settled.

Polish legislation allows VAT to be settled in a period other than that in which the document was recorded. The service of the date of VAT obligation allows to assign VAT transactions to a selected settlement period, regardless of the date of posting the document.

Posting VAT Documents in the General Ledgers

In connection with the requirements of Polish law, enterprises are required to put contractors in the VAT register of purchase and sale. In the case of the registration of purchase invoices from one-off suppliers, it is possible to avoid the necessity of setting up clearing accounts for them. The ERP system makes it possible by extending the functions of the main journals in the scope of booking transactions with VAT by adding the possibility of entering the contractor’s data without being associated with a settlement record.

Reverse Charge Handling

The reverse charge is a procedure that transfers the obligation to settle VAT to the purchaser. Taxes on a reverse charge basis are subject to: intra-Community acquisition of goods (WNT) and services, import of services and some domestic purchase transactions listed in the Annexes to the VAT Act. This introduces the need to show transactions with calculated VAT in the VAT register. The standard reverse charge functionality is used to calculate the input VAT charged and payable.