VAT management in the general ledger

The product tax does not exist in the general ledger documents, so that the tax determination cannot be the same mechanism that is in the sales or purchasing documents. In the Financial module, the VAT code can be inherited from the account or must be entered manually. Depending on the type of transaction, you need to change the defaulted VAT code if necessary during journal entry.

In addition to the VAT code on the line (principal general ledger), the VAT information is described in the general ledger through specific accounting data in Journal entries (GESGAS) and Accounts (GESGAC).

For transactions entered in upstream modules (Sales or Purchasing), the tax information is inherited from these transactions through the automatic journals that transfer correct VAT codes and the correct accounts into the general ledger.

For invoices entered in the A/P-A/R accounting module, there is also a tax determination based on the BP tax rule. It can be overridden during document entry, and it can be modified and must be modified if a different tax rule needs to be applied. A warning message displays if it is inconsistent, but it does not prevent you from continuing.

Concepts

Accounts (GESGAC)

The account defines a large part of the VAT management rules during the posting and the declaration processes. In particular, the account triggers the role of the amount in terms of VAT management and the tax allocation. If it is a purchase (deductible) or a sales (collected) account, you can default the tax code and some additional controls between the account and the tax code used, if necessary.

Tax management	Entries on this account
Not subjected	not subjected to VAT (no impact on VAT)
Subjected	subjected to VAT and needs to be declared (note: Amounts posted to this account are tax-excluded because the tax amount is posted to a dedicated account.)
Tax account	tax amounts only
EU tax	tax amounts only related to reverse tax situations
Prepayment account	used in some legislations for managing prepayments

Tax rates (GESTVT)

The tax rate code SA030 references the BP supplier tax rule DMS. Also take note that the VAT type is On debit. That means that the VAT is declared as soon as the journal entry is created.

Customer BP Invoices (GESBIC)

The account triggers the ability to enter the tax code.

Header section

Lines section

Journal entries (GESGAS)