Reviewing Examples of VAT Calculations

When calculating VAT, the system performs the following functions:

The system adds the net extended amounts of all bill lines that have the same VAT code to obtain a combined total net extended amount for that VAT code.

Bill Lines	Net Extended Amt.	VAT Code
1	30 EUR	A 10%
2	30 EUR	A 10%
3	100 EUR	B 5%
4	40 EUR	A 10%
5	100 EUR	B 5%

In the preceding example:

VAT Code A:30 EUR, 30 EUR, and 40 EUR = 100 EUR combined total net extended amount.

VAT Code B: 100 EUR and 100 EUR = 200 EUR combined total net extended amount.

If the invoice VAT calculation method is set to NET, the system subtracts any early payment discount percentages (Dscnt Pct) from the total net extended amount to obtain the VAT basis amount. If two percentage discounts exist, the system uses the larger of the two. The system uses no discount amounts, only discount percentages.

For example:
```
VAT Code A:100 EUR (total net extended amount) - 5 (early payment of 5% discount 
multiplied by the total net extended amount) = 95 EUR VAT basis amount
```
```
VAT Code B: 200 EUR (total net extended amount) - 10 (early payment of 5% discount 
multiplied by the total net extended amount) = 190 EUR VAT basis amount
```
If the invoice VAT calculation method is set to GROSS, the VAT basis amount equals the total net extended amount (regardless of an existing discount).

For example:
```
VAT Code A: VAT basis amount = 100 EUR (total net extended amount)
```
```
VAT Code B: VAT basis amount = 200 EUR (total net extended amount)
```

The system calculates the VAT amount by multiplying the VAT basis amount by the VAT code percent (VAT Pct).

For example, with a VAT calculation method of NET:

VAT Code A:95 EUR (VAT basis amount) * .10 (VAT percent) = 9.50 EUR (VAT amount)

VAT Code B: 190 EUR (VAT basis amount) * .05 (VAT percent) = 9.50 EUR (VAT amount)

With a VAT calculation method of GROSS:

VAT Code A: 100 EUR (VAT basis amount) * .10 (VAT percent) = 10 EUR (VAT amount)

VAT Code B: 200 EUR (VAT basis amount) * .05 (VAT percent) = 10 EUR (VAT amount)

The system proportionally distributes the VAT amount and VAT basis amount back into the individual bill lines by using the following calculation:

Line VAT Amount = net extended amount for line / total net extended amount for VAT code * VAT amount.

Line VAT basis amount = net extended amount for line / total net extended amount for VAT code * VAT basis amount

Rounding differences are adjusted onto the line with the largest amount. The current rounding method (as specified in the bill header VAT values) may affect the VAT calculation.

For example, for Bill Line 1 (Calc Method = NET):
```
Line VAT amount:2.85 EUR = 30/100 * 9.50
```
```
Line VAT basis amount: 28.50 EUR = 30/100 * 95 EUR
```

VAT Summary Information (VAT Calculation Method Net)

VAT Code	VAT Percent	VAT Discount Percent	Total Net Extended Amount	VAT Basis Amount	VAT Amount
A	10	5	100	95 EUR	9.50 EUR
B	5	5	200	190 EUR	9.50 EUR

VAT Summary Information (VAT Calculation Method Gross)

VAT Code	VAT Percent	VAT Discount Percent	Total Net Extended Amount	VAT Basis Amount	VAT Amount
A	10	5	100	100	10
B	5	5	200	200	10