VAT Detailed Summary
VAT Detailed Summary feature sets the VAT category codes (described in EN 16931-1:2017+A1:2019 European Legislation on eInvoicing) and description on every invoice line. This is required for eInvoicing or can be used optionally to include them on a printed invoice. VAT Detailed Summary feature also calculates VAT amount sub-totals by the tax rate and by VAT Category code. This is applicable if assigned to a tax code (required both for eInvoicing and VAT Detailed Summary on an invoice printout).
The new EU legislation taking effect from April 1, 2020 requires a Reason Code for VAT exemptions. This means that VAT Category codes with zero VAT rate will have a predefined and detailed Reason Code why VAT is not applied. The following are the definitions of VATEX codes, taken from the CEF web page:
-
Codes that identify specific articles in the European VAT Directive 2006/112
-
Codes that identify exemption reasons based on the Member State legislation
There are EU and local VATEX codes and VAT Category codes that can be used. Localization SuiteApp provides only the most common EU VAT Category codes (Subset of UNCL5305 VATEX code list) and some VATEX codes due the fact that there are so many codes and the scheme is due to changes. Both records support name translation, so users can have same code with different translation to better support local invoicing requirements.
To enable localization features:
-
Go to Setup > Customization > Localization Settings.
-
Open the record for your subsidiary.
-
Check the VAT Detailed Summary box.
-
Click Save.
To set VAT Categories and VAT Exemption reasons
-
Go to Setup > Accounting > Tax Codes.
-
Go to the Tax Code record.
-
Assign a respective VAT Category. This populates the VAT Category Code.
-
Assign the respective VAT Exemption Reason. This populates the VATEX Code.
You may have to create multiple tax codes in NetSuite for the same VAT rate and even VAT category in order to have different VATEX code in place. For example, category E can have multiple related VATEX codes.