VAT Reporting and Accounting

Three key VAT setup elements facilitate VAT accounting and reporting: VAT codes, VAT accounting entry types, and VAT transaction types. These setup elements are used in combination by the PeopleSoft VAT report definitions to determine the information to be included on each line of the VAT return. To facilitate reconciliation between the general ledger and the VAT return, these elements are also used in combination to determine the ChartFields to which VAT amounts are posted.

VAT Codes

You use VAT codes to specify the rate at which VAT is calculated.

The VAT rate is frequently the key to reporting VAT because VAT amounts must often be reported separately by VAT rate on a VAT return. Therefore, the VAT code is part of the reporting definition.

To facilitate reconciliation between the general ledger and the VAT return, VAT amounts are usually recorded separately by VAT rate in the general ledger. For this reason, you define VAT accounting information (also referred to as the VAT accounting template) by VAT code.

VAT Accounting Entry Types

In addition to requiring that VAT amounts be reported separately by VAT rate, your VAT return may require that VAT amounts for certain types of transactions be reported separately. For example, you may need to report adjustments made to VAT or VAT recorded on advance payments separately.

Again, to facilitate reconciliation between the general ledger and the VAT return, VAT amounts are usually recorded separately in the general ledger for each of the different types of transactions.

VAT accounting entry types are one of the mechanisms used to enable the correct reporting and accounting of these transactions. These are system-defined values that identify the different types of VAT accounting entries that may be required (for example, input-recoverable, input discount adjustments, output, output on credit memos, or output for purchases).

When you define VAT reports, VAT accounting entry types are used to identify the general types of transactions that should be included on any given line on the VAT return. For example, you might specify that input-recoverable VAT amounts be included on one line of the return while output VAT amounts be included on another line.

For accounting purposes, you define VAT accounting information for each of the VAT accounting entry types defined in the VAT accounting template. The accounting entry types available in this template are determined by the PeopleSoft applications you have installed. Not all of the VAT accounting entry types apply to your organization, so you can define dummy VAT accounts for those that do not apply.

Note:

This topic includes a table that lists the delivered VAT accounting entry types.

See VAT Environment Setup.

VAT Transaction Types

You use VAT transaction types to classify and categorize transactions at a more detailed level for both VAT reporting and accounting. These are specified for each transaction line when you enter a transaction.

You define the VAT transaction types that you need for your VAT setup. PeopleSoft software also provides a set of VAT transaction types as sample data.

In your VAT reporting definition, you use VAT transaction types to fine-tune the information that you want to include on a given line on the VAT return. You can do this by specifically including, or effectively excluding, certain types of transactions. For example, if you are located within the European Union (EU), you may need to report self-assessed output VAT for intra-EU acquisitions on one line in the return, while reporting self-assessed output VAT for services provided by foreign suppliers on another line. For both lines on the report, you indicate that you want to include transaction lines with a VAT accounting entry type indicating VAT Output on Purchase. For the first line, you also indicate that you want to include only those transactions that are flagged with a VAT transaction type indicating an intra-EU acquisition. For the second line, you indicate that you want to include only lines flagged with a VAT transaction type indicating a service provided by a foreign supplier.

For accounting purposes, VAT accounting information defined for each given VAT accounting entry type is applicable for all VAT transaction types unless it is overridden at the more detailed VAT transaction type level. In the cases in which you need to record VAT amounts in the general ledger at the more detailed level, you can indicate that VAT amounts for a given VAT accounting entry type be posted to different sets of ChartFields defined for each specific VAT transaction type.