Purchase Order invoice - adding VAT?

I've came across a situation where the vendor was initially setup to be paid in Euro and 0% VAT. However arrangements have changed and the vendor will be paid in GBP with VAT added. The issue is that there is an existing PO with receipts in Euro + 0% VAT.

I've tried raising a Purchase Invoice, change currency code to Euro then used the "Get receipt lines" function to pull the lines to be invoiced. I then pressed F9 to try and adjust the VAT amount however system won't allow it as the VAT % is locked to zero.

Can anyone please advise what would be the correct process to handle this scenario?

Best Answer

Answers

  • lubostlubost Posts: 555Member
    Currency doesn't any influence to VAT. VAT calculation is based on VAT posting group and VAT % in lines.
  • jonathanchyejonathanchye Posts: 34Member
    lubost wrote: »
    Currency doesn't any influence to VAT. VAT calculation is based on VAT posting group and VAT % in lines.

    Thanks for the reply. Financials is not my area of expertise so I'm not sure how to proceed with invoicing this Purchase Order. I can't seem to add VAT on as it's 0% VAT on the purchase receipt lines.
  • Slawek_GuzekSlawek_Guzek Posts: 1,684Member
    VAT comes from two things - VAT Business Posting Group and VAT Product Posting Group. In simple words % of VAT depends on what and to whom you are selling/buying from.

    Look into VAT posting setup you will see what % of VAT is assigned to each combination.

    VAT Business Posting Group comes into the Purchase Order from the Vendor, VAT Product posting group comes from the Item, but you can change them both on actual Purchase Order document. VAT Business Posting Group on the header, in Invoicing tab, VAT Product Posting Group on order lines
    Slawek Guzek
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  • jonathanchyejonathanchye Posts: 34Member
    > @Slawek_Guzek said:
    > VAT comes from two things - VAT Business Posting Group and VAT Product Posting Group. In simple words % of VAT depends on what and to whom you are selling/buying from.
    >
    > Look into VAT posting setup you will see what % of VAT is assigned to each combination.
    >
    > VAT Business Posting Group comes into the Purchase Order from the Vendor, VAT Product posting group comes from the Item, but you can change them both on actual Purchase Order document. VAT Business Posting Group on the header, in Invoicing tab, VAT Product Posting Group on order lines

    Thanks for the reply. Yes I’ve got that part but this is related to invoicing a purchase order which was received with 0% VAT. So when we pull the purchase receipt lines in the purchase invoice via Get Purchase Receipt lines function the lines will have 0% VAT.
    Normal way of applying VAT here is via Purchase Invoice Statistics (F9 button in the line) but I’m unable to adjust VAT amount as the VAT % field is locked to 0. You can try it on Chronus to see what I mean. We can adjust the amount to included in the total but this would mean the VAT posting journal would he wrong. Hope this explanation is clearer.
  • David_SingletonDavid_Singleton Posts: 5,454Member
    You should first reverse the existing receipt then cancel the order and create a new one.
    David Singleton
  • jonathanchyejonathanchye Posts: 34Member
    > @David_Singleton said:
    > You should first reverse the existing receipt then cancel the order and create a new one.

    I did think of that however the receipt was done over 2 months ago and some of the stock has already been consumed and shipped out.
  • lubostlubost Posts: 555Member
    Receipt is posted into Item Ledger Entries without VAT (usually) and VAT is (usually) invoice case. As Slawek wrote you have to check VAT posting groups in invoice lines. VAT is calculated in posting codeunit by multiplication of cost amount and VAT % (divided by 100).
  • jonathanchyejonathanchye Posts: 34Member
    Hmmm ok can someone please try this in a test database?
    Create a vendor with no VAT Business Posting Group and EURO currency code. Create a Purchase Order and receive the lines in.
    Now update the vendor with a VAT Business Posting Group with 20% VAT and GBP currency code.
    Create a new Purchase Invoice. Click on Function > Get Receipt Lines. You wouldn't see any lines.
    Change the currency code on the Purchase Invoice from GBP to EURO and repeat the above. You should be able to get the receipt lines.
    Highlight the receipt line and press F9 (this brings up the Statistics window which allows you to make adjustments to the invoice)
    In the VAT amount try putting in any value, you should get an error...
  • David_SingletonDavid_Singleton Posts: 5,454Member
    > @David_Singleton said:
    > You should first reverse the existing receipt then cancel the order and create a new one.

    I did think of that however the receipt was done over 2 months ago and some of the stock has already been consumed and shipped out.

    Then just do a financial reversal, since VAT doesn't really affect inventory.
    David Singleton
  • jonathanchyejonathanchye Posts: 34Member
    > @David_Singleton said:
    > jonathanchye wrote: »
    >
    > > @David_Singleton said:
    > > You should first reverse the existing receipt then cancel the order and create a new one.
    >
    > I did think of that however the receipt was done over 2 months ago and some of the stock has already been consumed and shipped out.
    >
    >
    >
    >
    > Then just do a financial reversal, since VAT doesn't really affect inventory.
    Thanks for the reply. Can you please explain more on how to reverse? The purchase order was fully received but not invoiced yet.
    Invoice document was sent by supplier in GBP with VAT however as explained when we create purchase invoice in NAV using Get Receipt Lines function we were unable to invoice in GBP with the VAT applied.
  • David_SingletonDavid_Singleton Posts: 5,454Member
    Then just do a financial reversal, since VAT doesn't really affect inventory.
    Thanks for the reply. Can you please explain more on how to reverse? The purchase order was fully received but not invoiced yet.
    Invoice document was sent by supplier in GBP with VAT however as explained when we create purchase invoice in NAV using Get Receipt Lines function we were unable to invoice in GBP with the VAT applied.

    Doing a reversal like this can be cumbersome to get it right, but its not complex, it just needs some one to sit with you and go through each step, not the sort of thing that is easy on a medium like this. Unfortunately it involves both knowledge of how Navision handles VAT, and understanding of how the document was posted and how you need it to be posted.

    My suggestions would be
    1/ Ideally contact your partner, have them come in and sit with you to show you how to sort it out. It wont take long.

    2/ The alternate is create a copy of your current company.and do the following
    2-a / Create a new document the way you actually want it to be.
    2-b/ post the current document to see what it looks like when posted.
    This now gives you a base line to see where you are and where you want to be.
    2-c/ Create a new scenario (either copy company again or recreate the original order with the receipt) and then post the documents needed to go from where the old system was to where you need it.
    This may all seem quite cumbersome, but it will help you understand the issue, resolve it AND you will know hot to fix it next time.

    David Singleton
  • jonathanchyejonathanchye Posts: 34Member
    Thanks all for the kind replies.
    I've actually found a simpler answer by changing the "VAT Bus. Posting Group" on the lines which seems to do the job.
  • naffnaff Posts: 31Member
    Normal way of applying VAT here is via Purchase Invoice Statistics (F9 button in the line) but I’m unable to adjust VAT amount as the VAT % field is locked to 0.
    Do not try to modify VAT % on the Invoice statistics Page. Change the VAT Product or VAT Business Posting Group on the Purchase Order lines instead. Change one or both to a combination setup to attract the desired percentage of VAT.
    Thanks all for the kind replies.
    I've actually found a simpler answer by changing the "VAT Bus. Posting Group" on the lines which seems to do the job.

    Hi guys. How did you change the VAT Bus. Posting Group on the line?
    In our version (2015) this field is not accessible for the lines - only in header.
    I do not want to change it in the header since it will recreate all lines and by doing so resetting all prices, item tracking and so on.

    Your posts suggest that it is safe to use this field event though it was not inteded by Microsoft.
    Have you experienced any trouble by using the field anyway?
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