Why do we need them all? In Sage you have Vat codes I am wondering why in Axapta there is all this? If someone can explain that would be great.
Kenton
I didnt think so!! Its very mis-understood from what I read. Am I right in thinking a VAT Group is what customers and suppliers go to. Item VAT is what products are assigned to and between them, a VAT rate is worked out.
I am unsure how a VAt code plays a role also.
Are you answering your own questions?
An item can have tax applied or not depending upon the customer/supplier involved.
So an item has a VAT group, this contains VAT codes. Customers/Vendors have VAT groups which also contain VAT codes. When a transaction is processed only one VAT code matches in each group and therefore the rate can be calculated. Selling the same item to a different customer could obtain a different rate, or selling to a different customer could obtain a different rate depending upon circumstances. As you are in the UK it would make more sense if you applied this to how it would work here.
I am not answering my own question. I was writing that I didnt think many people fully understand the VAT coding and also that from what I read on further investigation shows that alot of people are confused by it.
Your description seems a bit vague, but I understand parts. How do VAT codes etc ipact on general ledger journals where you want to make a posting and have a VAT element too?
If most or nearly all your customers and suppliers were UK based would you have STD set against all customers and supplier so that STD (standard) was a default VAT group and go from there or would you also need an Item VAT as well?
I understand parts but your description seems vague. I am not answering my own questions, that would be silly. I am explaining my findings on further investigating the subject, most seem confused on VAT as it was designed for the US market in mind.
How does VAT and the Item and Group VAT impact on GL postings?
If all of your suppliers/customers are UK based would you have 1 cust/supp group as Standard ?
Also when you are posting an invoice (invoice journal) why do you need an ITEM VAT code, shouldnt a VAT code be required here?
Strangely I have not met a finance consultant on AX confused by them, and the customers I deal with all seem understand them (but it is not my area), so perhaps it is a process of training.
If all of your suppliers/customers were UK based you would have one domestic group. alternatively you can have EU-VEND, EU-CUST and ROW or whatever breakdown you require. The domestic group would have have the tax codes for zero, standard, exempt etc. EU would have reverse charge zero and 17.5% both exempt.
So then lets say you have item as standard or zero. Standard would have EU-STD and STD, whilst zero would have EU-ZERO and ZERO.
Each of the VAT codes within each VAT group define the origin, settlement period, percentage and the VAT posting profile, and each VAT posting profile defines the ledger accounts hit. So teh VAT groups get to one defined VAT code and this VAT code has a posting profile which is referenced for the ledger postings.
As for the posting of the invoice journal I would guess you define the group to enable the appropriate code to be located. However if the entry is a single line I would presume you could define the VAT code directly and dispense withe the group configuration - unless you are doing any reporting from these groups, or you have a parameter set preventing this in a area of the system.
However I am not a finance consultant, so I would obviously suggest you speak to one.