Introduction - Display VAT amounts in sales and purchase documents
Companies can display and calculate VAT amounts in sales and purchase documents differently, depending on the Prices Including VAT settings on the customer or vendor card.
The selection that is made in the Prices Including VAT check box determines whether unit prices on sales documents and direct unit costs on purchase documents include VAT. You can set up the Prices Including VAT check box in the following areas:
Customer Card
Vendor Card
Item Card
Sales document header
Purchase document header
The following overview shows the description of the behavior of the Prices Including VAT option when you select it and when you do not select it on the customer and vendor cards.
Not selected - Sales and purchase documents are automatically set up to exclude VAT from unit prices and direct unit costs. Therefore, the price and cost fields on the respective document dynamically display Unit Price Excl. VAT and Direct Unit Cost Excl. VAT.
Selected - Sales and purchase documents are automatically set up to include VAT in unit prices and direct unit costs. Therefore, the price and cost fields on the respective document dynamically display Unit Price Incl. VAT and Direct Unit Cost Incl. VAT.
On the item card, if the Prices Including VAT option is not selected, VAT is not included in the unit price, and the unit price is copied directly from the item card to the Unit Price field on the sales line. If the Prices Including VAT option is selected, VAT is subtracted from the price on the item card before it is entered on the sales line, and the VAT Bus. Posting Gr. (Price) field must be filled in.
The following table provides an overview of how unit price amounts are calculated for a sales document when prices are not set up in the Sales Prices window.
| Prices Including VAT field on item card | Prices Including VAT field in sales header | Action performed |
|---|---|---|
| No check mark | No check mark | The Unit Price on the Item Card is copied to the Unit Price Excl. VAT field on the sales lines. |
| No check mark | Check mark | The VAT amount for each unit is calculated and added to the Unit Price on the Item Card. This total Unit Price is then entered in the Unit Price Incl. VAT field on the sales lines. |
| Check mark | No check mark | The VAT amount that is included in the Unit Price on the Item Card is calculated by using the VAT% that is related to the VAT Bus. Posting Gr. (Price) and the VAT Prod. Posting Group combination. The Unit Price on the Item Card that is reduced by the VAT amount is then entered in the Unit Price Excl. VAT field in the sales lines. |
| Check mark | Check mark | The Unit Price on the Item Card is copied to the Unit Price Incl. VAT field on the sales lines. |
If the Prices Including VAT function is set up on customers and vendors, you do not have to change the settings on the sales or purchase document headers. However, if amounts on individual documents must include or exclude VAT, the Prices Including VAT check box in the header can be changed.
If you change the Prices Including VAT setting in a sales or purchase document header, you will receive a message that asks you to update the unit price or direct unit cost on the lines. If you change the Prices Including VAT setting, any manual changes that you make to the unit prices or direct unit costs are overwritten.