VAT Rate: General Area

Field

Used for

Name

Provide a name for the VAT rate.

• It is a required field. If you do not provide a name for the VAT rate, you will not be able to save the rate. 

VAT type

Specify a VAT type for the rate by selecting a VAT type from the list of pre-defined types applicable throughout the EU:

• Base - standard VAT rate that has to be applied to all non-exempt goods and services. The base rate varies from country to country. For example, within the EU, the lowest base VAT is charged in Luxembourg - 17%, and the highest in Hungary - 27%.
• Reduced - reduced rates are applied to a limited variety of goods or services (listed in Annex III of the VAT Directive) and must be no less than 5%. Reduced rates also differ across various countries.
• Export - VAT is not charged on exports to countries within and outside the EU. Within the EU, the export rate is applicable only if you sell to businesses. If you sell to consumers, VAT is charged at the base or reduced rate. Export rate is pertinent to/represents zero-rated transactions, not exempt transactions, allowing vendors to deduct their input VAT. A reduced rate of zero is applied to items, so final price charged does not include VAT but the VAT paid on inputs is deductible.
• Exempt - the rate is used for goods and services on which VAT is not charged. If you sell VAT exempt goods or services, you do not add VAT to the sales price. If you buy exempt items, there is no VAT to reclaim.Exempt VAT involves no right to deduct the input VAT.
• Export exempt - no VAT is applied to exported exempt items. The export exempt rate does not provide for the right to deduct input VAT.
• No VAT - no VAT is levied on goods or services purchased from not a VAT payer.

You can also create a new VAT type if required.

Country

Specify a country where this VAT rate is applicable as VAT rules are applied differently in various countries and in case of cross-border transactions.

VAT rates are linked to countries where your customers/ vendors belong as well as to the country where your business is located.  

While entering information about your company, your customers/ vendors, you indicate countries of their residence and specify whether they are taxable or non-taxable persons (in case they are taxable persons, you also indicate a country of their VAT registration and enter their VAT registration numbers). While selecting certain business partners or your company in sales/purchase/import documents, only those VAT rates are fetched which are applicable in the country of supply (that is either the country of your business partner or your business) that is automatically determined based on the type of VAT transaction established by the system (whether it is cross-border VAT or domestic VAT).   

Rate,%

#

Document number (#) is assigned automatically when you save the VAT rate based on the selected numerator.

Only users with the appropriate permissions can override the auto-generated number and enter it manually.

After overriding the serial number, automated numbering will proceed in the same manner but using the manually set number as a start value.

Note

Add any extra details or comments about the VAT rate.

Inactive

Turn on the Inactive option if you want to deactivate a previously active VAT rate.

If a VAT rate is inactive, it will not be available for selection or use and will be accessible only on the listing page of the VAT rate directory.  

By default, this option is turned off and all newly created VAT rates are active. You can select active VAT rates from the lists for the VAT field in various documents and directories.