VAT types is a setup screen where you define the VAT rules the system uses to post and calculate VAT on financial entries, invoice lines and purchases. Each VAT type has a code, a display name and one or more sections that specify the financial account and rate for ordinary VAT, used-goods VAT or EU VAT with reverse charge, respectively.
The screen is opened via Financial by going to Accounting and then Setup and then VAT types.
If you cannot see the menu item, you probably do not have permission for it. Contact support.
VAT types is a definition screen. What you create here is used across the system:
Financial accounts — each financial account can be associated with a VAT type (the "VAT type" field in the account overview). This controls which VAT rate and account is used when posting to the account.
Journal lines — on entry lines in journals you can select the VAT type directly in the "VAT type" column.
Creditor categories — in the creditor categories' setup, a default VAT type and possibly a customized VAT type are specified, which are used automatically when purchasing from suppliers in the category.
Supplier preferences — in Financial you can set a default VAT type on the individual supplier.
Purchase settings — in Financial (Purchasing), surcharge and discount settings can have an associated VAT type.
Invoice and sales order lines — the VAT type is used by the product-item-selection services to calculate VAT on sales lines.
VAT reporting — the VAT types' accounts and rates feed directly into the calculation of the VAT statement (Accounting → VAT reports). It is therefore important that accounts and rates are correctly filled in and validated.
The list screen shows an overview of all defined VAT types. Double-clicking a row opens the edit screen for the selected VAT type.
See How to search in lists for more about searching and filtering.
Code: The unique system code for the VAT type.
Display name: The user-friendly description of the VAT type.
Rate: Shows the rate in percent. If it is a used-goods VAT type, the suffix "(Used)" is shown after the rate. If it is an EU VAT type, the suffix "(EU)" is shown. The suffix thus tells you which section the rate originates from.
Financial account: Shows the financial account associated with the VAT type. The system shows the account from the first filled-in section in prioritized order: VAT, then Used-goods VAT and finally the EU incoming account.
Validation status: An extra column at the far right, shown after you have clicked "Validate". A yellow marking indicates a warning; a red marking indicates an error on the VAT type in question.
Create ("+" dropdown button): Always available. Opens a dropdown with two choices: "Empty" and "From standard VAT types".
"Empty" creates a new, completely empty VAT type that you fill in from scratch yourself.
"From standard VAT types" opens a dialog where you can select a predefined standard VAT type. Code, display name and rate are filled in automatically based on the selected standard, and you can then adjust before saving.
Edit: Requires a row to be selected. Opens the edit screen with existing data.
Delete: Requires a row to be selected. Before deletion, the system checks whether the VAT type is associated with financial accounts. If the VAT type is in use, an error message is shown with a list of the financial accounts that use it, and the deletion is aborted. If the VAT type is not in use, a confirmation dialog is shown ("Delete the VAT type?"), and you can confirm or cancel.
Validate: Always available. Starts a check of all the VAT types in the list. The system calls a validation service that reviews the associated financial accounts. Rows with errors are highlighted with a red background color; rows with warnings are highlighted with a yellow background color. An extra icon per row shows the more detailed validation result. Use Validate when you have changed account setup or created new VAT types, to ensure everything is set up correctly before VAT reporting. If you correct an error in the edit screen and return to the list, you can click Validate again to confirm that the error has been resolved.
The edit screen opens when you create a new VAT type or edit an existing one. The screen contains a form with fields and sections.
Save and close: Saves the new or updated VAT type and returns to the list.
Cancel (Close): Discards all changes and returns to the list without saving.
Code: Unique system code for the VAT type, e.g. "S-DK-25". The code must follow a specific format (letters, numbers and hyphens are allowed); the system validates the code and shows an error message if the format is not valid. The code is also checked for uniqueness, so two VAT types cannot have the same code. The field is required.
Display name: A user-friendly description of the VAT type, e.g. "VAT-liable sales (DK), 25% VAT". Shown in selections and overviews in the system.
Standard VAT type: Optional association with a standard VAT type from the tax authorities'/system's standard chart of accounts. Used to keep track of which standard underlies the VAT type. If a previously selected standard VAT type has been decoupled as a result of an update to the standard chart of accounts, the following warning is shown in the field: "NOTE: Previous standard VAT type [code] was removed when applying the current version of the standard chart of accounts". The warning is informational only; you can still save the VAT type.
The edit screen has three sections. Only one of the VAT and Used-goods VAT sections can be filled in at a time — they are mutually exclusive. If you try to fill in both sections, the error message "Only VAT or used-goods VAT category can be filled in" is shown. The EU VAT section can be filled in independently.
Within each section, either all fields in the section must be filled in, or none. A partially filled-in section (e.g. financial account but no rate) gives a validation error.
Used for ordinary sales VAT or incoming VAT.
Financial account (VAT): The financial account on which the VAT is posted, e.g. account 7680 Sales VAT.
Rate (%) (VAT): The VAT rate in percent, e.g. 25. The field accepts decimal numbers and is subject to min./max. limits.
Clear (VAT section): The "Clear" button at the bottom of the section resets both the financial account and the rate for the VAT section. Use it if you want to empty the section and switch to a different type, e.g. Used-goods VAT.
Used when trading in used goods, e.g. cars or machines, where the VAT is calculated on the profit margin rather than the sales price.
Financial account (Used-goods VAT): The financial account on which the used-goods VAT is posted.
Rate (%) (Used-goods VAT): The used-goods VAT rate in percent. The same validation applies as for the VAT rate.
Clear (Used-goods VAT section): Resets the financial account and rate for the Used-goods VAT section.
Used for EU trade and transactions with reverse charge, where it is the buyer who accounts for the VAT.
Incoming VAT account: The financial account that receives the incoming EU VAT.
Contra account: The contra account used for reverse charge.
Rate (%) (EU VAT): The EU VAT rate. The field is validated as a number with min./max. limits. All three fields in the section (Incoming VAT account, Contra account and Rate) must be filled in together or all left empty.
Clear (EU VAT section): Resets all three fields in the EU VAT section.
Opened by selecting "From standard VAT types" in the create dropdown menu. The dialog shows a list of predefined standard VAT types grouped by category, e.g. sales VAT (DK), used-goods VAT and reverse charge. Select a standard VAT type and click OK. Code, display name and rate are filled in automatically in the edit screen, and you can customize before you save.
If you have questions, you are welcome to contact support.
Want to know more?
Read more in these related articles:
Accounting - Creating VAT types
This article explains how VAT types are set up in Sapera
VAT statement
This article explains how to generate a VAT statement report in Sapera
VAT reporting - automatic
This article explains how VAT reporting is performed automatically via the tax authorities' API in Sapera
