SAP has the functionality to cater for VAT changes during financial periods, as certain regions of the world require different VAT rates at different times of the year. Therefore, this process is seamless in Business One.

The below information will show you how to set your system up so that on the 1st of April you will automatically be charging 15% VAT instead of the present 14%.

All reports SAP standard VAT reports will automatically convert to the new rate.

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Step 1:

The first step is to re-configure the tax groups. This will let the system know of the new VAT amount and the date of the change.

Menu Path

> Administration

> Setup

> Financials

> Tax

> Tax Groups

You should be at this screen displaying the VAT codes that your company uses. You will only need to change the VAT codes where the Rate% is 14%

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Step 2:

The second step is to change the Vat%.

Select the line that you would like to change and click on Tax definition.

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The Tax Definition screen will come up for that particular Tax Code

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Step 3:

Go to the SECOND line of the Setup screen and enter the date of 01/04/2018 in the “Effective From” Column.

On the same line select 15 in the “Rate” Column

You should now have 2 lines on the setup, oneat14 andoneat15

Click on “Update” on the setup screen and “Update” again on Tax Groups screen

***NB***
The new Tax rate of 15% will only take effect on the 1st of April 2018. All transaction that take place till that date will be at 14%

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Step 4:

Your Vat Groups Screen should now look like this. It is correct that the “Rate” amount is 15

Repeat Steps 2 and 3 for the other codes that need adjusting.

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Step 5:

You can now change the Vat Code Names to make them more generic, this will make processing and reporting easier

Click on the Name in the “Name” column and type in the new name.

Click on Update to effect the change

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Your VAT Setup is now complete!

 

There are a couple of frequently asked questions that we can address now:

 

 

How do I test this process first?

 

You can use one of your test databases to test this process, after the setup has been completed create and invoice in March and an Invoice in April to make sure the VAT calculates correctly.

What happens with linked documents that bridge the VAT change?

 

  • March Invoice becomes an April Credit note: In this case the VAT will pull from the Base document so the credit Note will be at 14% VAT, this is the correct entry. If the products are re-invoiced the new invoice will be at 15% VAT.
  • What does this mean for my open documents? Since SAP draws the information from the base document your open documents that are copied over in April will have the Incorrect VAT amount on them. You can update them by simply re-selecting the VAT code on the document and the VAT will be updated to 15%.

How will my VAT reports work?

 

The VAT reports will remain the same, for a while there will be transactions with both 14% and 15% in the VAT report but each report shows which document has which rate.

Stuck?

 

Our support team has been trained on the above process in detail. Should you have any questions please feel free to contact them at:

  • support@bluekeyseidor.com
  • seidorsupport.freshdesk.com for the Support Portal
  • 011 622 7200