I would like to know how I could set up the VAT in Business central, in which the buyer self-charges VAT. For tax purposes, the customer is both the buyer (deducts) and the seller (charges). Reverse charge is also one of the cases in which VAT is not added to the invoice.
As a general rule, companies charge VAT on sales and deduct VAT on purchases. The reverse charge mechanism is a deviation from this rule, whereby the supplier does not charge VAT on their invoice, while the customer declares and deducts the corresponding VAT simultaneously on their own VAT return.
In the VAT registration group settings, under the VAT calculation type option, there is an option for reverse charge VAT, and I am unsure whether that should be the setting. I need help with this.
W1 version of Business Central does support Reverse Charge VAT Accounting.
Though the functionality is built to be used for EU region, if you need the same accounting and reporting feature (usually most of the countries have similar requirement) then you can use the reverse charge with this setup.
You have the option of Reverse Charge in VAT Calculation Type and option to define Rev. Charge G/Ls in the VAT Posting setup.
It would be too much to explain the functionality in too much detail so adding few links for your reference.
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