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If your organization is VAT-registered, and you receive an invoice from a VAT-registered supplier site, you are required to pay VAT charges to the supplier.

However, if your organization is located in an EU member state and the VAT-registered supplier site is located in a different EU member state, you are not required to pay VAT charges on invoices from the supplier, but you are required to report the charges to your tax authorities. You can use offset tax distributions to eliminate your VAT liability while maintaining a record of the charges.

You can use the Intra-EU VAT Audit Trail Report to review the original VAT charges for your intra-EU invoices. Payables includes in this report any charges from supplier sites located in other EU member states.

If you assign a default VAT tax name and an offsetting tax name to a VAT-registered supplier in an EU member state different from yours, then Payables can automatically create VAT and offsetting tax distributions for you when you enter invoices for that supplier.