Enable VAT Reverse charge mechanism for UAE in Microsoft Dynamics AX 2012/365 For Operations
Hichem.Chekebkeb
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ReportReverse charge mechanism is assumed to be used in UAE as part of the VAT framework the will be implemented from 1/1/2018. The goal is to simplify trade with suppliers from overseas. The mechanism makes the buyer report the VAT transaction on behalf of the seller. This makes the seller not required to register for VAT in UAE. The transaction will book VAT input and automatically passes it to VAT output. The transactions offset each other, but gives authorities full visibility.
In Dynamics AX 2012 / 365 For Operations, Reverse charge feature is enabled for UK, so we will try to enable VAT Reverse charge mechanism for UAE by adding the country's ISO code where needed.
1- Create a new project
2- Drag the following items from AOT to the project
- Classes
- Tax
- LedgerJournalTaxLine
- EDTs
- RCInvoiceThreshold
- RCInvoiceThresholdAmount_UK
- RCItemLineThreshold_UK
- RCItemLineThresholdAmount_UK
- ReverseChargeApplies_UK
- Forms
- LedgerParameters
- Tables
- ReverseChargeItemGroup_UK
- ReverseParameters_UK
- Action menu items
- RCSalesListCheck_UK
- RCSalesListCSV_UK
3- Appart from the classes add UAE ISO code in the CountryRegionCodes property
4- In Tax, LedgerJournalTaxLine classes open the methods determineTaxDirection, getDefaultTaxDirection respectively, locate the line SysCountryRegionCode::isLegalEntityInCountryRegion([#isoGB]) and add #isoAE to become like this: SysCountryRegionCode::isLegalEntityInCountryRegion([#isoGB, #isoAE])
5- Setup Reverse charge feature as described in Technet: https://technet.microsoft.com/en-us/library/gg231022.aspx
6- Create a purchase order to test the setup as described in Technet: https://technet.microsoft.com/en-us/library/gg230657.aspx
7- As result the system will generate the VAT input & output entries for the concerned items:
8- And the voucher would be something like this:
For reporting, I am still doing some researches, so, stay in touch.
DISCLAIMER: VAT Framework is still not officially published by the authorities as of the date of writing this post, so, the setup might be not applicable.
Comments
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@Ahmed Siliem I tried the update, This is a country specific, it will show if only you set your legal entity to SAU the feature will show otherwise it won't. I am afraid you will have to do the same concept in this post to the new update to make it appear for UAE. Let's know your findings.
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Hi All. After deploying update for GCC VAT, support.microsoft.com/.../sau-vat-regime-is-introduced-in-microsoft-dynamics-ax-2012-r3, I was able to change legal entity primary country from ARE to SAU. But in few of the client, country code is non-editable. I suspected it is because of transaction existence, but in other environments it is editable even after transaction data. There are mix AX version between different clients, AX 2012 R3 RTM, CU7, and CU12. Any idea on this ?
Did anyone faced the same after deploying this update ?
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Hi Hichem,
Have you tried the recently issued update from Microsoft specifically for GCC VAT functionality?
Try this link for (SAU) Country-specific Sales tax functionality update - Microsoft Dynamics AX 2012 R3:
support.microsoft.com/.../sau-vat-regime-is-introduced-in-microsoft-dynamics-ax-2012-r3
it should help since the VAT Law and VAT Implementing Regulations are same in GCC area.
Kind regards,
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as tested, enabling the "use tax" will make it work as same as the "reverse charge"
as when run the payment job it will reverse the transaction, also the important thing is when posting the purchase invoice the Ax will not make VAT value booked to the vendor account, rather will it will book it against the "payable tax use" account.
so far I see "use tax" is working well, let me know your comments please.
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