1. Using Financials for EMEA
  2. Enable VAT Split Payments

Enable VAT Split Payments

Oracle Payments lets you split payments made against foreign currency invoices into 2 payments. You can use one of them for paying VAT in local currency.

In some countries, such as Poland, it’s a regulatory requirement to report VAT amount in local currency when the invoice line item is in a foreign currency.

Enable the Feature

  1. Navigate to My Enterprise > Setup and Maintenance > Manage Standard Lookups.
  2. Search for lookup type ORA_ERP_CONTROLLED_CONFIG.
  3. In the lookup type, create a new lookup with the following values:
    • Lookup Code – IBY_34548052
    • Enabled – Checked
    • Start Date – Select system date
    • Meaning – VAT Split payment feature
    • Description – VAT split payment feature

Attach the VAT Split Bank Account at Supplier Setup

The supplier bank account setup includes a field called VAT Split Bank Account. According to the business scenario, you should map the VAT split bank account (in ledger currency) at the profile, address, or site-level foreign currency bank account. The VAT split bank account derives its default value from the foreign currency bank account on the invoice installment.

Important: You must disable the bank account approval through the Approve Internal Changes on Supplier Profile feature for the VAT Split Bank Account field to display.

Create a New Payment Method

Here's how you create a payment method.

  1. Navigate to Setup and Maintenance > Financials > Payments > Manage Payment Methods.
  2. Click the Create icon.
  3. Enter these header attributes:
    • Name: VAT Split Payment Method
    • Code: VAT_SPLIT_PM
    • Alias: TRF
    • From Date: Accept the defaulted value
  4. In the Usage Rules tab, deselect the Automatically assign payment method to all payees option. This ensures that this special payment method for the VAT split isn’t available to all the suppliers.
  5. In the Usage Rules > Payables tab, select the Enable for use in Payables option.
  6. Accept the default values for all other fields in the Payables tab.
  7. Ensure that you don't enable the feature in the Receivables for Customer Refunds and Cash Management tabs.
  8. Ensure that you don't select any options in the Validations, Bills Payable, and Additional Information tabs.
  9. Save the payment method.

Create a New Lookup Code Under the Pay Group

Here's how you create a payment method.

  1. Navigate to Setup and Maintenance > Financials > Payables > Manage Payables Lookups.
  2. Search for lookup type Pay Group.
  3. In the lookup type, create a new lookup with these values.
    • Lookup Code: VAT_SPLIT
    • Reference Data Set: Common Set
    • Meaning: VAT Split Pay Group
    • Enabled: Select this option.
    • Start Date: Select system date.
    • Description: Enter a meaningful description.

After enabling the feature, create the foreign currency invoice with the payment method and pay group specific to VAT split payments. This lets the application convert the foreign currency invoices with VAT lines into ledger currency and create separate payments for the VAT installments.