Understanding Deferred Invoices and VAT

A VAT law (DL 29/9/97 n. 328) that has been in effect in Italy since September, 1997 concerns deferred invoices in which the shipment date is prior to the invoice date. For deferred invoices, the VAT payable on sales should be declared with reference to the shipment date, not the invoice date. An example of deferred invoices is a product that is delivered daily and invoiced monthly.

The two types of deferred invoices are:

• The invoice date and shipment date are in the same reporting period, but the shipment date is prior to the invoice date.

• The invoice date and the shipment date are not in the same reporting period, and the shipment date is prior to the invoice date.

The second type of deferred invoice impacts summary VAT reporting. The VAT should be accounted for in the Print VAT Summary Reports (R74093) for the month of the shipment if that month is prior to the month of the invoice. To accomplish this task, the system evaluates the shipment date of a sales order to determine if it is prior to the invoice date. This evaluation is performed during the Sales Update process (R42800) through the use of a country server. If the shipment date is prior to the invoice date, the system updates the Service/Tax Date field in the F03B11.

When you run the Print VAT Summary Reports and select transactions by tax rate, the system uses the service/tax date, rather than the GL date, for deferred invoices.