How To: Report GST to a US Tax Authority

Article
12/01/2017

This topic describes the reports in Dynamics NAV that you can use to submit information about value-added tax (VAT) amounts for sales and purchases to tax authorities in your region.

You can use the following reports :

The EC Sales List European Community (EC) Sales List report lists the value added tax (VAT) amounts that you have collected for sales to VAT-registered customers in the European Union (EU) countries.
The GST Return report includes GST for sales and purchases to customers in all countries that use GST.

If you want to view a complete history of GST entries, every posting that involves GST creates an entry on the GST Entries page. These entries are used to calculate your GST settlement amount, such as your payment and refund, for a specific period. To view GST entries, choose the icon, enter GST Entries, and then choose the related link.

About the EC Sales List report

In the UK, all companies that sell goods and services to VAT-registered customers, including customers in other European Union (EU) countries, must submit an electronic version of the European Community (EC) Sales List report in XML format through Her Majesty's Revenue and Customs (HMRC) website. The EC Sales List report works only for countries in the EU.

The report includes one line for each type of transaction with the customer, and displays the total amount for each type of transactions. There are three types of transactions that the report can include:

B2B Goods
B2B Services
B2B Triangulated Goods

B2B goods and services specify whether you sold a good or a service, and are controlled by the EU Service setting in the GST posting setup. B2B Triangulated Goods indicate whether you engaged in trade with a 3rd party, and are controlled by the EU 3-Party Trade setting on sales documents, such as sales orders, invoices, CR/Adj notes, and so on.

After the tax authority reviews your report, they will send an email to the contact person for your company. In Dynamics NAV, the contact person is specified on the Company Information page. Before you submit the report, make sure that a contact person is chosen.

About the GST Return report

Use this report to submit GST for sales and purchase documents, such as purchase and sales orders, invoices, and CR/Adj notes. The information in the report is in the same format as on the declaration form from the customs and tax authorities.

GST is calculated based on the GST posting setup and the GST posting groups that you have set up.

For the GST return, you can specify the entries to include:

Submit open transactions only, or open and closed. For example, this is useful when you prepare your final annual GST return.
Submit only entries from the specified periods, or also include entries from previous periods. This is useful for updating a GST return that you have already submitted, for example, if a vendor sends you a late invoice.

To connect to your tax authority's web service

Dynamics NAV provides service connections to tax authority websites. For example, if you are in the UK, you can enable the GovTalk service connection to submit the EC Sales List and VAT Return reports electronically. If you want to submit the report manually, for example by entering your data on the tax authority's website, this is not required.

To report VAT to a tax authority electronically, you need to connect Dynamics NAV to the tax authority's web service. This requires that you set up an account with your tax authority. When you have an account, you can enable a service connection that we provide in Dynamics NAV.

Choose the icon, enter Service Connections, and then choose appropriate link.
Fill in the required fields. Choose a field to read a short description of the field or link to more information.

Note

It's a good idea to test your connection. To do this, choose the Test Mode check box, then prepare and submit your GST report as described in the To prepare and submit a GST report section. While in Test Mode, the service tests whether the tax authority can receive your report, and the status of the report will indicate whether the test submission was successful. It's important to remember that this is not an actual submission. To submit the report for real, you must clear the Test Mode check box, and then repeat the submission process.

To set up GST reports in Dynamics NAV

Choose the icon, enter GST Report Setup, and then choose the related link.
To let users change and resubmit this report, choose the Modify Submitted Reports check box.
Choose the number series to use for each report.

To prepare and submit a GST report

Choose the icon, enter EC Sales List or GST Return, and then choose the related link.
Choose New, and then fill in the required fields. Choose a field to read a short description of the field or link to more information.
To generate the content of the report, choose the Suggest Lines action.

Note

For the EC Sales List report, you can review the transactions included in the report lines before you submit the report. To do that, choose the line, and then choose the Show VAT Entries action.
4. To validate and prepare the report for submission, choose the Release action.

>  [!NOTE]

Dynamics NAV validates whether the report is set up correctly. If the validation fails, the errors display under Errors and Warnings so that you know what to fix. Typically, if the message is about a missing setting in Dynamics NAV, you can choose the message to open the page that contains the information to correct.
5. To submit the report, choose the Submit action.

After you submit the report, Dynamics NAV monitors the service and keeps a record of your communications. The Status field indicates where the report is in the process. For example, when the authorities process your report, the status of the report changes to Succeeded. If the tax authority found mistakes in the report you submitted, the status of the report will be Failed. You can view the errors under Errors and Warnings, correct them, and then submit the report again. To view a list of all your EC Sales List reports, go to the EC Sales List Reports page.

Viewing communications with your tax authority

In some countries, you exchange messages with the tax authority when you submit reports. You can view the first and the last message you sent or received by choosing the Download Submission Message and Download Response Message actions.

Submitting GST reports manually

If you use another method to submit the report, for example by exporting the XML and uploading it to a tax authority website, afterward you can choose Mark as Submitted to close the reporting period. When you mark the report as released, it becomes non-editable. If you must change the report after you mark it as released, you must reopen it.

GST settlement

Periodically, you must remit the net GST to the tax authorities. If you need to settle GST frequently, you can run the Calc. and Post GST Settlement batch job to close the open GST entries and transfer purchase and sales GST amounts to the GST settlement account.

When you transfer GST amounts to the settlement account, the Input Tax Credit account is credited, and the sales GST account is debited with the amounts calculated for the specified period. The net amount is credited or debited, if the Input Tax Credit amount is larger, to the GST settlement account. You can post the settlement immediately or print a test report first.

[!NOTE]
When you use the Calc. and Post GST Settlement batch job, if you don't specify a GST Bus. Posting Group and a GST Prod. Posting group, entries with all business posting groups and product posting group codes are included.

Configuring your own GST reports

You can use the EC Sales List report out-of-the-box, however, you can also create your own reports. This requires that you create a few codeunits. If you need help with that, contact a Microsoft Partner.

The following table describes the codeunits that you must create for your report.

Codeunit	What it must do
Suggest Lines	Fetch information from the GST Entries table, and display it in lines on the GST report.
Content	Control the format of the report. For example, whether it is XML or JSON. The format to use depends on the requirements of your tax authority's web service.
Submission	Control how, and when, you submit the report based on the requirements of your tax authority.
Response Handler	Handle the return from the tax authority. For example, it might send an email message to your company's contact person.
Cancel	Send a cancellation of a GST report that was submitted earlier to your tax authority.

Note

When you create codeunits for the report, pay attention to the value in the VAT Report Version field. This field must reflect the version of the report that is, or was, required by the tax authority. For example, you might enter 2017 in the field to indicate that the report conforms to the requirements that were in place that year. To find the current version, contact your tax authority.

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