VAT returns

Use this function to extract values for a VAT declaration using an existing VAT form created in the VAT form function (GESVEF). After you have extracted and validated the declaration, you can generate the file to submit to your tax authority.

Note - informationThis function is exclusive to the VAT framework process.

You can extract values in Simulation or Actual mode.

Simulations can be run for a VAT entity, for all or a single company, or for all or a single site. Values display in the Simulated value column in the VAT to declare and Detail by company grids. Each new simulation overwrites the previous.

Actual extractions can only be run for the VAT entity.

Get started

VAT reference date

The reference date for VAT declaration extractions and all related processes, including journal entries and automatic journals, is defined by the DCLVATDAT - Date for tax declaration parameter (CPT chapter, VAT group) value. This can be the accounting date or the document date.

The VAT date can be updated in the Journal entries function (GESGAS) as long as the journal entry to be updated has not been included in an actual declaration.

Print codes

If you set up a print code linked to one or more reports for the VAT form, you can select a report from the Print button, List option. This is useful if your legislation requires multiple VAT return reports.

Before you begin

You can only use an Active VAT form.

You must set up a VAT entity (GESVATGRP) even if you are submitting for a single company.

You can set up VAT entry groups (GESGTEGRP) to facilitate VAT box management.

Values are extracted based on the VAT boxes setup (GESVTB).

Using an offline form

You can create a VAT return and extract values using an offline VAT form.

For British VAT declarations, you do not authenticate with HMRC and you cannot submit directly using an offline form. You need to enter start and end dates. These values are defaulted in the VAT on debit and VAT on payment blocks. VAT year and Period are not required extraction criteria.

In the VAT to declare section, the following fields do not display: Due date, Version, Last submission and URL. Extract, Validate, and Control still apply. The Submit action is disabled.

When you extract in Actual mode for an offline VAT return, you are warned that the declared VAT amounts in the journal entries are updated and cannot be modified.

For British declarations only

You must be signed up with the HMRC Making Tax Digital website to submit your declaration.

You can submit directly to the HMRC website from this function in online mode only.

Note - informationSee the Making tax digital how to guide for more information.

If the return uses an offline form, the authentication with HMRC on Create is deactivated and the Submit action is not available. You cannot submit a return using an offline form.

After you Submit your declaration, you must check the status to ensure that it was accepted by HMRC without errors. Check the Results screen to see if there are errors. If so, you must address those errors, revalidate, and resubmit.

For Belgian declarations

You cannot submit directly to eAdmin, which is a stand-alone product by Sage.

Select Validate then select Submit to generate the tax file and save, using the Belgian declaration (DCLVATBEL) export template.

You can regenerate the form as often as necessary by selecting Submit each time.

VAT framework

The VAT framework includes dedicated functions designed to facilitate calculating and validating VAT returns and generating the VAT preparatory report. For some legislations, you can submit directly from the VAT returns function. For specific legislations, there is a preset structure for VAT boxes and tax file generation that conforms to the respective tax laws. There is also a generic VAT declaration that can be customized for legislations not part of the framework.

Note - informationRefer to the legislation how to guides for specific information.

Within the VAT framework, the company legislation and the VAT declaration process are separate.

Example

A company with a Belgian legislation may need for one of its sites to register for French VAT and to extract VAT on this site according to French fiscal authorities rules. You can do this by defining a dedicated VAT setup where the VAT declaration is set to the French declaration (DCLVATFRA) and the legislation company is set to BEL.

This setup needs to contain the VAT boxes required by French fiscal authorities according to the 3310-CA3 declaration (as defined in standard setup for DCLVATFRA+FRA) and the corresponding mapping rules (with the document types and tax codes used in the Belgian site). And it has to be run on the VAT entity containing the site to declare in France.

In addition, the standard setup DCLVATBEL+BEL can be run on the VAT entity containing the sites of the Belgian company, except the site to declare in France.

Declarations included in the framework

The list of declarations that can take advantage of the VAT framework continues to grow. Additions are mentioned in the Sage X3 Release notes.

If your country/legislation is not yet included in the framework, you can use the Generic VAT declaration (DCLVATGEN) and manually set up VAT boxes and the VAT form.

Legislation presettings are delivered independent of the VAT reporting framework setup. A legislation presetting can include a dedicated VAT box structure, but that does not imply that you can use the remaining functions within the framework.

Building the declaration structure

Except for the VAT boxes function, these functions are exclusive to declarations that are part of the framework. See the respective online help for each function for detailed information.

VAT boxes, not exclusive to the framework (GESVTB)

Use this function to create the VAT box structure for the declaration. If you select DCLVATGEN, you must select a legislation and manually create the required VAT box structure.

For all VAT declarations using the VAT framework: When setting up VAT boxes, the VAT box codes defined here must be the same when setting up the VAT form (GESVEF). This consistency must be respected for the automatic extraction of data for submission in the VAT returns function (GESVFE).

VAT entry groups, framework only (GESGTEGRP)

Use this function to create an entry type group for a given legislation when setting up VAT declarations. In the VAT boxes function (GESVTB), you can use the entry group code for detail VAT boxes on a single line rather than entering multiple lines for detailed entry types. Entry type groups share the same Tax code + Tax management + Tax allocation combination.

VAT entities, framework only (GESVATGRP)

Use this function to create and manage VAT entities for a single or multiple companies or a single or multiple sites. With VAT entities, you can define distinct VAT returns at the site level.

VAT form, framework only (GESVEF)

Use this function to set up the VAT form for a specific legislation. You can use this form to create VAT returns (GESVFE). You can reuse the same form for different years, different VAT entities (GESVATGRP), and so on. The VAT box codes defined for the VAT form must be consistent with the VAT boxes (GESVTB) setup.

You can also use this function to enter a print code that links multiple VAT return reports that you can access from the VAT returns function (GESVFE).

Extracting data and validating a declaration

Currently, only the British declaration (DCLVATBRI) submits declarations to the British tax authority (HMRC) directly from the VAT returns function (GESVFE). For all other legislations, the VAT returns function extracts the data and generates a file or report that you need to submit manually to the respective tax authority.

VAT returns, framework only (GESVFE)

Use this function to set up and generate the VAT declaration for a VAT entity. You can extract data in simulation or actual mode. In simulation mode, you can extract for one or multiple companies or one or multiple sites. You can also run the preparatory report.

VAT return extraction (VFECLC)

Use this function to extract data for multiple VAT entities in simulation or actual mode.

VATRETURNS report, framework only

This report can be accessed from the VAT returns function for simulated or actual extraction. It replaces the preparatory report functionality in the Belgian declaration (DCLVATBEL), British declaration (DCLVATBRI), and French declaration (DCLVATFRA) functions.

Details on VAT on collections

Principles for determining the amounts to be declared

A matching group contains 3 elements, which are control account, business partner and match. It can include several payments and several invoices.

The amounts to be declared are determined:

  1. By the matching group whose matching date falls between the required date range and all the entries that make up the group.
  2. By searching in each matching group the triggering entries whose due date is prior or equal to the entered due date.
  3. By determining whether the payment amount equals the sum of the amounts associated with a business partner account, or matchable account, of the triggering entries in the matching group:
  • Determining the tax-included and VAT basis
  • Search on all the entries of the matching group (irrespective of the entry type) of those lines posted to an account whose Tax management is Not subjected. See the help for the Tax management field in the Accounts function (GESGAC).
  • Tax code on payments
  • Total by tax code
  1. By determining whether the VAT to be declared equals determined basis amounts:
  • Limited to the payment amount
  • Minus the VAT to declare amounts declared on the entry line and the VAT on the debits to be paid

If the VAT on payment amount to be declared is less than the matching group VAT on payment amount (for partial payments), the amounts to be declared are allocated proportionally to each group entry associated with a VAT on payment tax code.

Launching the VAT on payment declaration process can be carried out:

  • In Simulation mode: The Declared tax fields for the entry file are not updated.
  • In Actual mode: The Declared tax fields for the entry file are updated. Actual mode does not apply to British declaration (DCLVATBRI).

Special settings

Discounts and VAT on payment

The discount destination must have the following settings in the Payment attributes function (GESCDA):

  • For Account structure, select Account <=> BP. Then, select the Separate journal checkbox.
  • For Tax management, select Tax recovery. See the help for the Tax management field in the Accounts function (GESGAC).

The discount entry must be posted to a non triggering entry type.

The discount accounts must be set up as follows:

665000: Discounts granted

Subject – Sales collected

VAT on payment tax code

765000: Discounts obtained

Subject – Purchase deductible

VAT on payment tax code

Entering the payment must be carried out for the net discount amount. The discount line must be allocated on the invoice and must be entered with a VAT on payment tax code.

Example:

Recording of the invoice FAK-DEL0001-019

5,000.00

1,030.00

6,030.00

Payment TRG-DEL0001-012

-20% of the invoice

1,000.00

206.00

1,206.00

With a discount of 5%

50.00

10.30

60.30

That is a net payment of

1,145.70

Amount in currencies 1,145.70
Dest. Type Entry Site Cur Amount Amount posted TAX
ENC INV FAC-ASN0001-024 ASN EUR 1,145.70 1,145.70
ENC INV FAC-ASN0001-024 ASN EUR 1,145.70 005

Prepayment and tax declaration on payment

The entry designed to save the prepayment posting must be a triggering entry type. The prepayment entry can be either triggering or not.

The discount accounts must be set up as Discount accounts. They must be different from the customer or supplier control accounts with Tax management set to Not subjected.

The VAT account to be adjusted must be set up with Tax management set to Not subjected.

The tax codes for the VAT account and the prepayment account must be set up with Tax management set to VAT on payment.

Note - information See the help for the Tax management field in the Accounts function (GESGAC).

Cases not managed

Multi-business partner entries

When an invoice has several business partners, or equivalent, you cannot identify the excl. tax and VAT amounts associated with each business partner. You cannot manage the VAT on payment.

Note - warningFor a payment entry containing several prepayments, and consequently several BP tax incl. prepayment lines and several VAT lines, you cannot combine a tax incl. line and a VAT line and generate the VAT on payment. You can do it for a single-phase payment transaction for a bank deposit with grouping on deposit slips.

Multi-business partners invoices

When an invoice has several business partners, or equivalent, you cannot identify the excl. tax and VAT amounts associated with each business partner. You cannot manage the VAT on payment.

Late payments

Following a payment by check, the tax is payable when cashing the check. In practical cases, the tax is settled on posting the check in the bank. If the check is not credited, the payment cannot take place.

On entering the late payment, you can reconsider the VAT that was initially declared.

In this case, the business partner account of the late payment is matched with the initial payment and the corresponding invoices. During the next VAT declaration, you can declare the tax in the reverse order.

Posted statements

Posting an invoice statement results in the following:

  • An entry (REL) to the debit and credit of the business partner account impacted by the total amount of the statement
  • Matching all the open items on the statement with the credit of the entry

The invoices are then considered as paid by the VAT process.

Partial payment posted on several invoices

When a partial payment is posted to several invoices, the VAT calculation algorithm does not consider the amounts posted to each of the invoices. This information is not available in the posting file.

Example:

Entry for an invoice of 500,000 103,000 603,00 VAT 20.6%
Entry for an invoice of 1,000,000 55,000 1,055,000 VAT 5.5%

Partial payment of 542,600 EUR posted with 120,600 EUR to the first invoice and 422,000 EUR to the second invoice, that is:

On the first invoice 100,000 20,600 120,600
On the second invoice 400,000 22,000 422,000

A VAT to be declared of 42,600.00

VAT declaration on the 31/01/2000

The payment amount is distributed proportionally by the processing over the 2 invoices that leads to the following VAT amount to be declared:

FAC-007 : 542,600 * 603/1,658 = 197,338.84 that is 33,707.96 of VAT

FAC-007 : 542,600 * 1,055/1,658 = 345,261.16 that is 17,999.40 of VAT

Total: 51,707.36

Capital letter match between an invoice and a credit note

When the conditions below exist, because there is no payment in the match group, these journal entries are not considered in the VAT on payment extraction process. No VAT amount is declared in the VAT reports, which is normal.

  • An invoice is matched to a credit note with a capital letter match code and there is no other journal entry matched to the invoice and credit note.
  • The matched invoice and credit note contain tax codes where the VAT type is VAT on payment.

This also implies that the VAT to declare amounts in the journal entry line are not updated and they remain empty.

As a result, for these journal entries, the CONTVAENC - VAT on payment control report (VAT - Others group) always displays the lines on the VAT accounts with a VAT to declare amount equal to zero, as if the VAT declaration was missing on these lines.

Special tax rule for the deduction on author rights

Invoicing document containing:

  • Two lines corresponding to a VAT base and the associated output VAT, with a payment tax code.
  • Two other lines corresponding to a VAT basis and to the associated input VAT, with a payment tax code.

The entry is subject to an uppercase matching with a triggering entry for the sales tax/money collection.

During the first run of the VAT declaration/money collection declaration process in Actual mode, the declared amounts are correct. However, the VAT process is not meant to be run again on that same uppercase matching group. Such an invoicing document should not be entered.

Prerequisites

Note - informationRefer to the documentation on Implementation.

Screen management

Extraction criteria tab

VAT posting tab

If VAT posting is active for the VAT entity, the fields in this section are available. If not, the Posting status is Not managed and these fields are disabled.

General settings

Journal entries for VAT returns are posted using the VAT automatic journal. The journal entries offset the total VAT amount calculated for each company in the return into the Tax to disburse or the Tax credit accounts. The accounts are defined in the Accounting code lines function (GESCAC) for site and company entities.

The calculation and posting are made by considering VAT amounts extracted on detail boxes of the VAT return.

For a VAT entity with multiple companies or sites, you need to define the intercompany accounts used for journal entries in the Intercompany accounts mapping function (GESTCI), as well as the reciprocal accounts defined in chart of accounts setup.

Settings for manual adjustments

If required, manual adjustments can create an additional journal entry line for the Head company of the VAT entity.

To manage adjustments, you need to complete the following:

  • In the VAT form function (GESVFE), select VAT boxes for the VAT due box, which holds the total submitted VAT amount due.
  • Select the Deductible VAT box, which holds the total submitted VAT deductible amount.
Note - informationIf you do not define these VAT boxes, adjustments are not considered and the related VAT adjustment balance is not posted.
  • In the Accounting code lines function (GESCCL), you need to define the adjustment account in the VAT adjustment balance modifier. This can be set at the company and/or the site level.

VAT to declare tab

Detail by company tab

Specific actions

Error messages

The only error messages are the generic ones.

Tables used

Note - informationRefer to the documentation on Implementation.