Managing VAT—Exercises

Basic Data Setup

Site

Purpose: The purpose of this exercise is to customize your site to be used in the following exercises. The site must be connected to a company that uses the VAT tax type, as specified below.

Windows:
Site
Sites per User

1. Verify that your site is connected to company 15 (IFS Racing Sweden AB) and has a delivery address connected.
2. Connect your site to your user as the default site.

General exercise for Enter Sites

Note: Remember to connect your site to company 10 after finishing these exercises, unless you continue with other VAT exercises.

Required Data

Tax Code

Purpose: The purpose of this exercise is to create tax codes to be used in the following exercises.

Windows:
Tax Codes

1. Create tax codes according to the table below.

General exercise for Tax Codes

Tax Class

Purpose: The purpose of this exercise is to create a tax class to be used in the following exercises.

Windows:
Tax Classes

1. Create a tax class XX1 (where XX stands for your initials) with description Tax Class 1.

General exercise for Tax Classes

Tax Codes per Tax Class

Purpose: The purpose of this exercise is to connect tax codes to the tax class.

Windows:
Tax Codes per Tax Class

1. Open the Tax Codes per Tax Class window and search for the tax class created in the above exercise.
2. Enter the information shown in the table below.

General exercise for Tax Classes

Setting up VAT Conditions

Purpose: The purpose of this exercise is to show how to set up VAT conditions for a domestic customer, an international customer, and a customer within the European Union.

Windows:
Company
Delivery Types
Customer
Inventory Locations
Sales Part
Inventory Part
Receive Inventory Part
Package Part
Non-Inventory Sales Part

1. Open the Company window and click the Invoice/Tax Information sub tab.
2. Query for company 15. Verify that the Tax Regime is VAT in the Tax Regime field.
3. Make sure the Tax Liability field is set to TAX (or any tax liability of type Taxable).
4. Open the Delivery Types window and create the delivery types XXG, Goods, and XXS, Services.
5. Company 15 (IFS Racing Sweden AB) is a Swedish company. C.S.C Stockholm is located in Sweden and, therefore, considered a domestic customer. C.S.C. San Francisco is located in the U.S. and, therefore, an international customer. And C.S.C Liverpool is an English customer belonging to the European Union.
6. In the Customer window, create XX-555, C.S.C Stockholm, as a domestic customer by entering general data. Continue by selecting VAT as the Tax Regime on the Address/Delivery Tax Information sub tab. Select SWEDEN as the Supply Country and make sure that the Tax Liability field is set to TAX. If the tax calculation basis is the gross amount or the price including tax, select the Use Price Incl Tax check box in the tax calculation basis table in the  Customer/Order/General tab for company 15.
   Next, select the Print Amounts incl. Tax check box on the Order/Misc Customer Info sub tab.
7. Create XX-111, C.S.C San Francisco, as an international customer. Enter the VAT conditions for the international customer by selecting VAT as the Tax Regime on the Address/Delivery Tax Information sub tab, then selecting SWEDEN as the Supply Country and EXEMPT (or any tax liability of type Exempt) in the Tax Liability field. Continue by creating a new line and enter delivery type * and VAT tax code 0 on the Tax Free Tax Codes tab.
8. Create XX-661, C.S.C Liverpool, as a customer within the European Union. Enter the VAT conditions for the customer in the European Union by selecting VAT as the Tax Regime on the Address/Delivery Tax Information sub tab, then selecting SWEDEN as the Supply Country and EXEMPT (or any tax liability of type Exempt) in the Tax Liability field. Continue by entering one line with delivery type XXG and VAT tax code E1 and one line with delivery type XXS and VAT tax code E4 on the Tax Free Tax Code tab.
9. Open the Inventory Locations window and create two picking locations at your site.
10. Open the Sales Part window and create XX-18-900, Race Car De Luxe, as a stored sales part. Add a VAT tax code (1 through 4) in the Tax Code field on the General tab. Enter XXG in the Delivery Type field on the Misc Part Info tab. Manually receive some parts into stock.

Note: If the tax calculation basis is the price including tax, select the Use Price Incl Tax check box in the General tab.

11. Create XX-58-300, Wheel Kit, as a package part that consists of two pieces of XX-58-325, Race Wheel (stored sales part), and 12 pieces of XX-98-111, Wheel Bolts (stored sales part). Create the parts in the Sales Part and Package Part windows. Add a VAT tax code (1 through 3) in the Tax Code field on the General tab. Enter XXG in the Delivery Type field on the Misc Part Info tab.

Note: If the tax calculation basis is the price including tax, select the Use Price Incl Tax check box in the General tab.

12. Receive some parts of XX-58-325 and XX-98-111 into stock in the Receive Inventory Part window.
13. Create XX-58-400, Tire Replacement, in the Non-Inventory Sales Part window. Enter tax class XX1 in the Tax Class field on the General  tab. Enter XXS in the Delivery Type field on the Misc Part Info tab.

General exercise for Customer
General exercise for Enter Sales Part
General exercise for Enter Package Part
General exercise for Enter Inventory Part
General exercise for Enter Locations
General exercise for Receive Inventory Part
General exercise for Enter Non-Inventory Sales Part

Main Exercises

Using VAT for a Domestic Customer

Purpose: The purpose of this exercise is to show how to sell parts to a domestic customer and receive VAT on the invoice.

Windows:
Customer Order
Customer Invoice
Archived Reports

1. XX-555, C.S.C Stockholm, wants to order 50 pieces of XX-18-900, Race Car De Luxe, 30 pieces of XX-58-300, Wheel Kit and 30 pieces of XX-58-400, Tire Replacement.
2. Open the Customer Order window and create a customer order header with order type QO and add the order lines.
3. Look at the Tax Code and Tax Code Description fields on the three order lines.
4. Release the customer order and note the customer order number:_______________
5. Open the Customer Invoice window.
6. Search for the customer order in the Customer Invoice window and look at the Gross Amount, Net Amount, and Tax Amount fields in the upper part of the window.
7. Click the Lines tab and look at the Tax Rate, Gross Curr Amount, Net Curr Amount, and Tax Curr Amount fields.
8. Search for the printed invoice by populating the Archived Reports window. Look at the VAT shown on the printed invoice.

Note: Remember to re-connect your site to company 10 after this exercise, unless you continue with other VAT exercises.

Using VAT for an International Customer

Purpose: The purpose of this exercise is to show how to sell parts to an international customer and not receive VAT on the invoice.

Windows:
Customer Invoice
Archived Reports

1. XX-111, C.S.C San Francisco, wants to buy 25 pieces of XX-18-900, Race Car De Luxe, 10 pieces of XX-58-300, Wheel Kit and 10 pieces of XX-58-400, Tire Replacement.
2. Create a customer order header with order type QO and add the order lines.
3. Look at the Tax Code and Tax Code Description fields on the three order lines. What is shown in the fields?
4. Release the customer order and note the customer order number:_____________
5. Open the Customer Invoice window and look at the Gross Amount, Net Amount, and Tax Amount fields in the upper part of the window. Is anything shown in the Tax Amount field? Why not?
6. Click the Lines tab and look at the Tax Rate, Gross Curr Amount, Net Curr Amount, and VAT Curr Amount fields. Is anything shown there?
7. Search for the printed invoice by populating the Archived Reports window and study it.

Note: Remember to re-connect your site to company 10 after this exercise, unless you continue with other VAT exercises.

Using VAT for Customers within the European Union

Purpose: The purpose of this exercise is to show how to sell parts to a customer within the European Union and not receive VAT on the invoice.

Windows:
Customer Order
Customer Invoice
Archived Reports

1. XX-661, C.S.C Liverpool, wants to order 35 pieces of XX-18-900, Race Car De Luxe, and 20 pieces of XX-58-300, Wheel Kit and 20 pieces of XX-58-400, Tire Replacement..
2. Create a customer order header with order type QO and add the order lines. Enter delivery types on the order lines. Use both delivery types.
3. Look at the Tax Code and Tax Code Description fields on the three order lines. What is shown in the fields?
4. Release the customer order and note the customer order number:______________
5. Open the Customer Invoice window.
6. Search for the customer order in the Customer Invoice window and look at the Gross Amount, Net Amount, and Tax Amount fields in the upper part of the window. Is anything shown in the Tax Amount field? Why not?
7. Click the Lines tab and look at the Tax Code, Tax Rate, Gross Curr Amount, Net Curr Amount, and Tax Curr Amount fields. Is anything shown there?
8. Search for the printed invoice by populating the Archived Reports window and study it.

Note: Remember to re-connect your site to company 10 after this exercise, unless you continue with other VAT exercises.

Creating a Tax Report—Sales

Purpose: The purpose of this exercise is to generate a report showing VAT sales.

Windows:
Update GL Vouchers
Fetch Tax Ledger Info

1. Open the Update GL Vouchers dialog box to start updating vouchers to general ledger.
2. Open the Fetch Tax Ledger Info dialog box to retrieve data into the tax ledger.
3. Open the Order Report window.
4. In the Report list, enter or select Tax Report – Sales. Choose Customer from the drop down list in the Details column and click OK.
5. The Report Print dialog box opens. Click Preview or print the report.
6. Study the report. What is defined on the report and how is the data organized?
7. Which VAT codes show VAT amounts? Why?
8. How does the data for XX-555 C.S.C. Stockholm, XX-111 C.S.C. San Francisco, and XX-661 C.S.C. Liverpool differ? Why?

Note: Remember to re-connect your site to company 10 after this exercise, unless you continue with other VAT exercises.