Hi,
Please advice if we could trade into multiple European countries having a single Legal Entity in D365FO?
For example - If D365FO can create SO and delivery items to 10 European countries with their local VAT in each but having a single Legal Entity ?
Each European country would also have their own tax liabilities to be cleared.
I look forward a response, suggestion and possibilities.
Many Thanks in advance!!
@kranthi has not been on this site for nearly 4 years now!
The question posed is not clear.
Can you trade into multiple European countries having a single legal entity? Yes. A company in France for example can trade into Germany, Spain, Italy etc. The Tax would be configured within the French rules for domestic, EU and the rest of the world or whatever the French legal requirements are.
Your second part is confusing. Sale Orders delivered to 10 European countries, yes as above. With their local VAT in each country having a single legal entity. The VAT would be local to the selling company and the country it is in.
IF what you are asking is can 10 companies trade as 1 company out of 1 country I would advise against it. Localisation in D365FO is in part based upon the country code in the company information, I seem to remember Spanish Tax returns only working if the Country Code is ESP, and why would you want legal reporting to the Spanish government to be undertaken by any company not registered in Spain. The legal complexities and the tax reporting etc. of trying to merge 10 legal entities from 10 separate countries into 1 legal entity in D365FO and get the tax setup and reporting correct, not to mention a host of other issues would be a non-starter (Moving stock and intercompany trade, Intrastat for goods trading in the EU reporting, EC Sales list declarations etc. etc.). I would ask the customer, if they are asking this, to ask their auditors that question!
The answer, if they are 10 legal entities in 10 countries with different tax legislations, localisations etc. would be to have these as 10 legal entities in D365FO, and if you wanted financial elements to be consolidated you would have a Group consolidation company for this.
I will not go as far to say it cannot be done, but I am not sure under what circumstances I would advise to do it.
Thanks Adam.
Even I am back to forum after some time and I remember yourself and Kranti had been proactive.
Basically UK and Singapore is already live.
The same company (into retail) headquartered in the UK would like to expand business into 10 EU countries. Netherland be the base hence the Legal Entity for remaining nine EU countries too.
Design originally proposed to have a single entity to trade across European countries.
Finance team also advised that they are progressing to register for VAT not only in Netherlands but also in other nine countries.
Do you think in this case a single EU entity be a viable solution?
How VAT will be worked out across EU countries from a single entity?
How localisation will be dealt?
How customers and items will be shared? Mater sharing or Duplicate sharing?
And more in such scenarios…
Above are my concerns. Please advise.
Kind Regards
Abhi
Yes, I believe that is possible for single entity in the Netherlands trading into the EU. I believe the business has to have a selling value threshold to register for VAT in an EU country, but I am sure they know that. I believe you can register as a one stop shop (OSS) or in each country individually and you would pay normal VAT for the Netherlands and then do a second VAT return for transactions in the destination country and claim VAT back on expenses spent in that country.
Localisations do not matter, it is a Netherlands legal entity registering for VAT in other countries. You dont need to share anything, it is one legal entity.
Ultimately speak to the customer to understand the detail, let the finance consultant configure it.
That’s helpful, thanks Adam.