VAT Validation

Here is how the system validates VAT information:

  • It compares the totals of the entered VAT lines with the control totals on the pending item.

  • It compares the VAT transaction amount and the VAT amount to the total item amount for items entered in PeopleSoft Receivables.

    If an item is interfaced from PeopleSoft Billing, PeopleSoft Billing calculates the amounts.

  • It validates and tracks the VAT registration IDs of some countries.

Note:

The system automatically calculates the VAT amount if you enter pending items online.

You cannot post a pending item unless the first validation is successful. The sum of the transaction amounts for each VAT line must equal the control transaction amount, and the VAT amounts total must equal the control VAT amount. Also the VAT transaction amount and VAT amount for each item must equal the total amount of the item.

The system receives VAT information for external groups and edits both the entered and calculated totals for validity. If the calculated totals and the entered totals do not match, the system first checks the VAT tolerance percentage. If the difference exceeds the percentage, the system checks the tolerance amount. If both the percentage and the tolerance amount are exceeded, the system assigns the status Calc Error (calculation error). If the percentage is exceeded but the amount is not, the tolerance is met and the system assigns the item the status No Error. If you receive an error, you can review the VAT entries for the group and make corrections, as necessary.

Note:

PeopleSoft Receivables allows a within-tolerance difference because the Receivables Update process, reporting, and journals are always based on the VAT amount shown on the invoice as sent to the customer.

You can enter a VAT Registration ID for an item online, receive an ID from an external billing system, enter an ID on the Identification page of the VAT Entity component, or enter an ID on the Customer VAT Info page of the General Information component as long as the country associated with the VAT Registration ID has been set up on the VAT Country Options page.

When you set up a VAT entity for a country, you must enter a VAT Registration ID. If you do not enter a Registration ID, the system displays a message informing you that this is a required field. Once you have entered a VAT Registration ID, the system validates whether the Registration ID is correct. If it is incorrect, the system displays another message, which instructs you to enter a correct ID.

You are not required to enter a VAT Registration ID for a country on the Customer VAT Info page. When you select the country on this page, a 2-character country code appears, as needed, next to the VAT Registration ID field. If you choose to enter a VAT Registration ID on this page for a country that has been set up on the VAT Country Options page, the system does not validate the VAT Registration ID that you enter for every country. The system will only validate the VAT Registration ID for the countries on this list:

  • Australia — AUS

  • Belgium — BEL

  • Canada — CAN

  • France — FRA

  • Germany — DEU

  • Ireland — IRL

  • Italy — ITA

  • Netherlands — NLD

  • New Zealand — NZL

  • Spain — ESP

  • United Kingdom — GBR

Note:

Use the VAT Header page to review VAT information for external groups or to enter VAT information for internal groups that have not been posted.