VAT Calculation Type Field, VAT Posting Setup Table

Reverse Charge VAT

Use this option when doing business with other countries/regions in the EU where the purchaser must calculate and settle the VAT accounts with the tax authorities.

Remember to fill in the Reverse Chrg. VAT Acc. field also. Selecting this option does not affect the company’s financial reports. If you sell products with reverse charge VAT, the program does not calculate or retain the VAT. When you purchase products, the program calculates the VAT amount, debits the supported VAT account and credits the reverse charge VAT account, generating the autoinvoice/autocredit memo required by the tax authority to justify these general ledger entries.

No Taxable VAT

Use this option for those combinations of VAT business posting group and VAT product posting group that will not generate any VAT ledger entry, as the concepts that give rise to this combination are not subject to VAT. The program will automatically insert a percentage of VAT and EC equal to "0" in the VAT % and EC % fields.

Microsoft Dynamics NAV will not generate any VAT entry in the VAT Entries window. Do not confuse the non-taxable operations (which do not generate VAT) with exempt operations, which are those that generate a 0 VAT amount. The non-taxable operations would not appear in any VAT report or in the books of invoices issued/received.