The creation and use of tax codes in SAP Business One plays a central role in the area of VAT administration. These codes are decisive for the calculation of VAT amounts, both for the advance VAT return and for the VAT return. Other than ledger accountstax codes are used specifically for the calculation of tax amounts for deliveries and other services to other EU countries.
Creation of tax codes in SAP Business One
These tax codes are created in the "Administration" module under "Definition", "Financial accounting" and "Tax". In the "Tax codes" window, you can create the codes required for the company. For example, a typical SAP Business One client requires ten tax codes:
- Five input tax codes for the purchasing area
- five output tax codes for the sales area.
Setting options for tax codes
There are various setting options for creating tax codes. The coding of the tax codes is freely selectable. Inactive codes cannot be used when entering documents. The category also determines whether a tax code is used in purchase or sales documents. The "EU" characteristic determines whether documents with this tax code are relevant for the recapitulative statement. Further specifications relate to the type of service, such as intra-Community deliveries, other services or triangular transactions, as well as the definition as acquisition tax or reverse charge tax.
Reverse charge procedure
A special case is the so-called reverse charge procedure, in which the VAT liability is transferred to the recipient of the service. This applies to intra-Community acquisitions from other EU countries and certain situations under § 13b UStG. If an input tax code with this feature is used, the purchase tax is also posted in addition to the input tax. For special sales transactions, such as tax-free EU deliveries or services that are subject to the reverse charge procedure, certain mandatory information is required on invoices. These can be defined in the "Text for tax code on invoice" column.
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