Setting Up VAT Recoverability Rules
Access the VAT Recoverability Setup Revisions form.
- Purchase Use Code
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Enter a value from UDC 76/PU to identify how the purchased item or service is used. The system uses this value as part of the unique key to retrieve the recoverability rule.Note: When you enter a value in the Purchase Order Code field in the header section of the form, the system adds lines for CBS, IBS State, and IBS City taxes in the detail section. The system also assigns the current date as the effective date and sets the recoverability percentage to 100 for these lines. You must validate and update the recoverability percentage in accordance with government regulations.
- VAT Type
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Enter the VAT category for recoverability setup from UDC table 76/VT. Valid values are:
01: IS
02: CBS
03: IBS State
04: IBS City
The system uses this value as part of the unique key to identify the recoverability rule.
- G/L Code
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Enter the G/L class code to be used for recoverable VAT accounting lines. The system resolves account posting using this class code along with UDC 76/GL and DMAAI mappings.
- VAT Recoverable Rate
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Enter the percentage of the VAT amount that is recoverable. The default value for CBS , IBS State, and IBS City tax is 100 that denotes a 100 percent recoverability. The system calculates the recoverable amount using this formula: `Recoverable Amount = VAT Tax Amount × Recoverable Percentage / 100`.
- Effective Date
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Enter the date from when the recoverability rule is valid. During the tax calculation, the system retrieves the most recent effective rule that is valid for the transaction date.
- Expiration Date
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Enter the date after which the recoverability rule expires.