[How to] VAT Settlement Correction Posting Concept Dynamics FO

Dear Dynamics 365 Lovers,

Lets brush up the concept for VAT settlement correction declarations 

Countries can settle and post tax by probable two ways when it comes to VAT correction declarations.

Business Scenario 1:

When the VAT is settled and posted for a particular period, after that, if any transactions are recorded or corrected on that settled period (if required only), customer may want to report those corrections in their next settlement of VAT.

Business Scenario 2:

When the VAT is settled and posted for a particular period, if any transactions are recorded or corrected (if required only), customer may want to report those corrections on the same period even though the settlement is already done for once.

Lets explore 

Driven by Configuration 

The both aforementioned scenario is driven by a small configuration 

General Ledger-> Ledger Setup-> General Ledger Parameters-> Sales tax tab-> Tax-> Include Correction

If Yes- Scenario 1 is met

If no- Scenario 2 is met

How the operation is done

Business scenario 1 :

When the corrections are recorded into the already settled period and corrections are settled into the next period and the configuration is done in GL, the declaration form will look like below.

Tax-> Declarations -> Settle and post Sales tax-> It shows in the header "Sales tax settlement incl. corrections"  

Business Scenario 2: 

When the corrections are recorded into the already settled period and corrections are settled into the same period and the configuration is done in GL, the declaration form will look like below.

• Tax-> Declarations -> Settle and post Sales tax-> It shows in the header "Sales and post sales tax"  
• In this process, we shall see the extra filters, explanations are as follows

Original - When the settlement is done for the first time for that period.

Latest Corrections- This is selected once the corrections are recorded after the first settlement is posted (original)

The above segregation is posted by a the same way in Sales Tax Payment 

See below screen shot- Original was settled first and then latest correction was posted for the same month (in this case, two times latest corrections because multiple time settlement was posted)

It goes for the "Report Sales Tax For settlement Period" with the similar filter but some more specification 

Original- First time settlement report

Correction- All new transactions/corrections posted after original settlement 

Latest Correction- Only the latest Correction (this is possible business does report multiple corrections, hence this will only show latest correction settled)

Total- All settled including original settlement + all corrections settlement for the period.

I do believe, this post will add some value to your daily work and if needed, do not hesitate to ask or feedback on this.