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 (required for eInvoicing or optionally used by users for the purpose of getting this printed on the Invoice). VAT Detailed Summary feature also calculates VAT amount sub-totals by the tax rate and by VAT Category code if assigned to tax code (required both for eInvoicing and VAT Detailed Summary on 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 predefined and detailed reason code why VAT is not applied. The following are the definitions of VATEX codes, taken from the CEF web page:
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codes that identify specific articles in the European VAT Directive 2006/112
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codes that identify exemption reasons based on Member State legislation
There are EU and local VATEX codes and VAT Category codes that can be used. The 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 many codes and the scheme is due to changes. Both records now support name translation so you can have the same code with different translations to better support local invoicing requirements.
To enable localization features:
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Go to Setup > Customization > Localization Settings.
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Click Edit on the record of the applicable subsidiary.
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Check the VAT Detailed Summary box.
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Click Save.
To set VAT Categories and VAT Exemption reasons
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Go to the Tax Code record.
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Assign a respective VAT Category. This populates the VAT Category Code.
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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 VAT category to have different VATEX codes in place. For example, category E can have multiple related VATEX codes.
In the following figure you can see the EC Sales Tax Code with VAT Category (red rectangle) and VAT Exemption Reason (purple rectangle). After you select a Category and Exemption from the lists, the system displays the VAT Category Code and VAT Exemption Code fields.
