VAT 2015 in Europe

Kowa

Starting 1 Jan 2015, new VAT rules for telecommunications, broadcasting and electronic services will apply in the EU.
VAT will then always be taxed in the EU member state where the customer is established.
http://ec.europa.eu/taxation_customs/taxation/vat/how_vat_works/telecom/index_en.htm

Apart from having to consider this for price calcuations, the current VAT posting setup will not be able to handle these new regulations.
Does anybody know what Microsoft is planning to meet these new requirements?

Obviously, for companies offering these services all over Europe it can get very complicated.
To avoid having to register for VAT in each country separately you can register in one country only in a "mini one-stop shop" (MOSS) from which it will be forwarded to the other member states. VAT can then be declared and paid via the MOSS web portal.
http://ec.europa.eu/taxation_customs/resources/documents/taxation/vat/how_vat_works/telecom/one-stop-shop-guidelines_en.pdf
Has anybody heard of any planned interfaces for MOSS?

Luc_VanDyck

The Microsoft office in Belgium answered they won't do any customizations for this, as only a minor part of the installations are affected. So now we have to build it ourself. Has anyone started or better finished this project? Now we have to tell our customer that this VAT regulatory change is not executed by Microsoft, although the customer has a maintenance contract which should cover these regulatory changes... .

jglathe

Hi,

we are in the process of implementing some changes for the VAT setup. Our driver were not the recent changes, it has been planned for a while. The new regulations can be implemented with this, too, at least IMO. We have added three additional properties to the VAT "setup matrix":

- service or delivery type - code field, so if there are other types you can define them
- place of fulfillment - country code field
- type of transaction - option for now, purchase or sale (direction), comes from the document

And there are additional fields in the master data to give default values for place of fulfillment and service or delivery type. These will be used to determine a good default for these fields for a given sales or purchase transaction:

Place of fulfillment comes from shipment address / customer adress / company information. You could think of using location code, too, for purchases.
Service or delivery type comes from sales/purchase line type, account, item, ressource, fixed asset, or (more our case) customer and vendor.

These additional fields are part of a sales/service or purchase document, also in header and lines. what we do with it is use it for a lookup table to translate the VAT posting groups which were in the master data and have been fetched into the document with the ones that are used in the VAT posting setup, with the right setup for VAT calculation type, VAT% and accounts and so on. This way we can spread the VAT posting groups from fairly general in the master data to hair-splittingly precise in the VAT posting setup and VAT statement depending on the type of transaction and place of fulfillment. Which only VAT accounting specialist understand, btw But they can set it up, so they will be happy, hopefully.

The good part of this solution is that the core VAT logic of NAV isn't changed in any way. The not-so good part is that it adds a little complexity. But hopefully for the better.

with best regards

Jens