Draft Accounting Entries for VAT

Value added tax (VAT) is recorded at draft payment posting if you enter a VAT declaration point on the invoice as the payment date. The VAT amount is calculated based on the VAT rate that was effective on the invoice date.

This table shows the accounting entries that are generated when payments include VAT:

VAT Recovery Percentage	Accounting Entries
The VAT recovery is 100 percent.	DR VAT Input Recoverable (VIR) CR VAT Intermediate Recoverable (VIIR)
The VAT recovery is less than 100 percent.	DR VAT Input Recoverable (VAT Amount * Recoverable %) (VIR) DR VAT Input Non-Recoverable (VAT Amount * (100 − Recoverable %)) (VIN) CR VAT Intermediate (VIIR) CR VAT Intermediate Non-Recoverable (VIIN)
The VAT recovery percentage is equal to 0.	DR VAT Input Non-Recoverable (VIN) CR VAT Intermediate Non-Recoverable (VIIN)
The VAT Recalculate at Payment option is set.	One or a combination of the following entries: DR Discount Taken (VIDA) CR VAT Input Recoverable (VIDR) CR VAT Input Non-Recoverable (VIDN)