Creating Acquisition Tax Codes
Acquisition tax is calculated for goods purchased by EU businesses from vendors in other EU countries. Acquisition tax represents the tax that would have been paid had the goods been purchased outside the EU. Acquisition tax paid for purchases is offset by an equal purchase tax amount. Both the acquisition tax and the purchase tax are shown on VAT reports for transactions with vendors in other EU countries.
You can create tax codes for acquisition tax by selecting a notional tax rate on the tax code record.
To create an acquisition tax code:
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Go to Setup > Accounting > Taxes > Tax Codes > New.
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Enter a name or abbreviation for this tax code.
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In the Rate field, enter 0%.
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Enter the date range this tax code is applicable.
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Check the EC Code box.
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In the Notional Rate Derived From field, select the tax code that this notional tax rate is based on.
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In the Tax Type field, select VAT.
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In the Available On field, select Purchase Transactions.
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Click Save.
You can now select this tax code on purchase transactions.
When you view the VAT on Purchases Summary and Detail reports, the Notional Tax Amount column shows the acquisition tax amounts.
To understand tax code properties and how they are used for generating the VAT/GST reports from NetSuite, read the country-specific tax topics. For most countries, a tax code table is provided for guidance.