Taxable Status and VAT Rates

In PeopleSoft applications, you identify the taxable status for a given transaction by specifying the VAT applicability for a transaction line. This table lists the system-defined values that are provided:

VAT Applicability	Description
Taxable	VAT is chargeable either at a zero or nonzero rate.
Exempt	Item is nontaxable or exempt from VAT, and no VAT is charged.
Exonerated	Used when the purchasing organization has been exonerated from paying VAT. This value is the same as taxable at a zero rate.
Outside Scope of VAT	Item is outside the scope of VAT, and no VAT is charged.
Suspended	Used when the purchasing organization has been granted suspension from paying VAT. This value is the same as taxable at a zero rate.
VAT-Only	This value is applicable only within PeopleSoft Payables when you enter a third-party voucher and within PeopleSoft General Ledger when you enter a journal line against a VAT account.
Not Applicable	This value is valid only for transactions that are completely non-VAT applicable.

For taxable lines, VAT must be calculated at the rate applicable to the goods or services being sold or purchased, as defined by the tax authorities in each country.

Within the PeopleSoft VAT environment, you define VAT rates at the VAT authority. One or more VAT authorities may be combined under one VAT code. The total of the VAT rates specified on all the associated authorities is the VAT rate applicable to that VAT code. A VAT code is applied to a transaction line, which enables VAT for that line to be calculated at the rate specified for that VAT code.