Example of Document Fiscal Classifications

The document fiscal classifications classify transactions for tax determination and reporting. Use this classification when the tax determination and reporting processes need the documentation associated with the transaction.

The following scenario illustrates how Intra-EU supplies are controlled through zero-rating of transactions. A zero-rating is given to a transaction only when the export documentation related to the transaction is received.

Scenario

When the export documentation isn't received in time, the customer is invoiced with the VAT that is applicable in the country of the supplier. The transaction is not zero-rated, which is the normal case for Intra-EU business-to-business supplies.

To model this scenario, create a document fiscal classification and attach it to a transaction only when you receive the documentation. If the document fiscal classification isn't attached to a transaction, the Intra-EU goods business-to-business supply rules aren't triggered and the applicable VAT is charged.

When the documentation is received after the invoice is generated, the invoice that is sent is credited and a new invoice is produced.

Create the following document fiscal classification:

Level	Fiscal Classification Code	Fiscal Classification Name	Country	Start Date
1	INTRA-EU DOCUMENTS	Sales Transaction	-	The earliest transaction date or start date of tax.
2	INTRA-EU EXPORT DOCUMENTATION	Intra-EU Export Documentation Received.	-	The earliest transaction date or start date of tax.

The tax rule that defines the conditions under which the Intra-EU supply of business-to-business goods are zero-rated includes a determining factor as shown in the following table:

Determining Factor Class	Class Qualifier	Determining Factor	Operator	Value
Document	Level 2	Document Fiscal Classification	Equal to	INTRA-EU EXPORT DOCUMENTATION

Tip: Specify the country name while creating transaction business categories. This ensures that a limited applicable list is presented while entering the document fiscal classification during transaction or tax rule creation.

Tip: In this classification and many other tax classifications, classify the nonstandard items of your business as standard items. This can be modeled as a default tax rule and therefore, doesn't require an explicit classification or an explicit rule. Classify only exception items and define specific tax rules for them. For a standard item, none of the explicit tax rules apply except the default rate.