Understanding VAT in PeopleSoft Billing

To create VAT documents, including customer invoices and sales orders, you must first set up the VAT environment and enable the business units for VAT. The VAT information that is on customer invoices and sales orders is calculated based on the data that you enter. For example, the VAT codes determine the VAT rates that the system uses to calculate the VAT amount.

You can print VAT amounts on the customer invoices and sales orders, as needed. The VAT information that is on the transactions is loaded into the VAT transaction table and then into the VAT reporting tables, from which you can create VAT returns and other VAT reports.

Several VAT-related fields exist that must be populated for VAT transactions to:

Calculate VAT.
Generate the appropriate VAT accounting entries.
Ensure that sufficient information exists to enable VAT returns to be compiled.

For example, the system requires the VAT registration status of the parties who are involved in a VAT transaction, the type of VAT transaction, and the rate at which VAT is calculated.

The global VAT default routines provide a centralized mechanism for the storage and retrieval of this information. PeopleSoft Billing obtains VAT defaults by calling the global VAT default routines.

See Establishing VAT Defaults.

Note: If all bill lines are not MOSS (Mini One Stop Shop) or non-MOSS lines for a VAT transaction, then bills cannot be saved or status changed to Ready.

VAT Drivers, VAT Driver Keys, and the Default Hierarchy for VAT Defaults

Default VAT information is controlled by VAT drivers, and is retrieved through a hierarchy. The following table lists the VAT drivers and associated VAT driver keys in VAT default-hierarchy sequence from most specific to least specific for the VAT Defaults component. The table also indicates which drivers control defaults for the services VAT treatment.

Note: The VAT drivers that appear in this table include only those that apply to PeopleSoft Billing.

The VAT drivers appear in the order of the hierarchy that the system uses to process defaults.

The Sales Line Identifier and Sales Line Identifier Group VAT drivers are used to retrieve VAT information for the bill lines only.

Bill Source and Bill Type VAT drivers share the Bill Source SetID driver key because both drivers belong to the same record group.

VAT Driver	VAT Driver Keys	Country	State	Applicable to Regular VAT Defaults	Applicable to Services VAT Treatment Defaults
Sales Line Identifier	SetID Identifier Table Identifier	Optional	Optional	Yes	Yes
Sales Line Identifier Group	Identifier Group SetID Identifier Table Identifier Group	Optional	Optional	Yes	Yes
Customer Location	Customer SetID Customer ID Address Sequence Number	Optional	Optional	Yes	Yes
Customer	Customer SetID Customer ID	Optional	Optional	Yes	Yes
Bill Source	Bill Source SetID Bill Source ID	Optional	Optional	Yes	Yes
Bill Type	Bill Type SetID Bill Type ID	Optional	Optional	Yes	Yes
Billing Business Unit	Billing Business Unit	Optional	Optional	Yes	Yes
VAT Entity Registration	VAT Entity Country	Not applicable	Optional	Yes	No
VAT Country	Country	Not applicable	Optional	Yes	No

VAT on Fully Paid Invoices

VAT calculations are not performed in PeopleSoft Billing for fully paid invoices. Where applicable, a fully paid invoice must have VAT calculated before the bill is sent to Billing through the Billing interface.

Fully paid invoices are not printed during the standard Billing invoice generation and printing process. If an invoice is required to comply with VAT rules, you can reprint the invoice using the Billing invoice reprinting features.

VAT on Deposits

VAT is considered inclusive for any deposit, deposit applied, deposit refund, and deposit refund fee amounts. If the system is set up to apply VAT to advance payments, then Billing calculates VAT and, if necessary, reduces the net extended amount for the line by the VAT amount. When a customer makes a deposit, the transaction is associated with the customer's deposit identifier, BI_LINE. The system populates the CUST_DEPOSIT_ID field. This field is used to identify the original deposit invoice when the deposit is subsequently applied to an invoice or refunded. Deposits applied and refunds will copy the VAT defaults from the original deposit.

VAT on Corporate Voucher Payments

Billing does not handle VAT on corporate voucher payments. Accounting entries for VAT are created by Accounts Receivable when payment is applied to the invoice.

VAT reverse charges

The global VAT defaulting function will identify the transactions that are subject to VAT reverse charges. The reverse charge will only apply to specified goods that are purchased within the UK by a VAT-registered business for business purposes. The purchaser of the goods, rather than the seller, will be liable to account for the VAT on the sale. This is also called customer VAT. Billing invoices will not include the customer VAT on the invoice amount due, but will indicate the amount that the customer must account for. Self-service pages will indicate the customer VAT amount separate from the invoice amount due.

Deposit-related lines will not be subject to VAT reverse charge.

Note: VAT reverse charge will not be passed to PeopleSoft Receivables, PeopleSoft General Ledger or PeopleSoft Payables.