Dynamics Community Forum Thread Details

Prepayment with VAT

Hello,

I am running Navision 2015 and want to be able to have VAT applied to prepayment invoices. Is there a simple settings change that can be done to achieve this?

Alternatively, is there a way to invoice before goods received?

Scenario is that we make prepayments for purchases but need to pay the VAT once an invoice is received and before the goods are shipped.

Many thanks in advance.

Hello,

NAV 2015 is out of mainstream support already.

However ... yes, it is possible to have VAT applied to prepayment invoices ... this VAT is usually unrealized.

It will have to be changed to realized VAT at the time when payment is received.

NAV handles this automatically.

The following comments base on the W1 version of NAV.

In order to achieve the unrealized VAT handling for prepayment purchase orders you need to set the "Prepayment Unrealized VAT" flag in General Ledger Setup and the "Unrealized VAT Type" option and the "Purchase VAT Unrealized Account" in the VAT Posting Setup combination.

Important Note.

The VAT Posting Groups used to determine the VAT (% and amounts) for the prepayment invoice are NOT taken directly from the purchase order lines. Instead the VAT Posting Groups are taken from the "Prepayment G/L Account" associated with the Purchase Order Line (from the G/L Account that is specified in the General Posting Setup)

In the Purchases / Payables Setup you set the "Check Prepmt. when Posting" flag to block the PO from being shipped & invoiced before the open prepayment invoice has been applied by a payment (the application of the prepayment invoice by the payment also changed VAT from unrealized to realized.

If you now post a Prepayment Invoice for a PO the Unrealized VAT is created (VAT Entry exists).

This VAT will not be taken into accoutn for the VAT Statement report yet.

With the settings mentioned above it is not possible yet to receive goods or post the final invoice-

Only when you pay and "apply" the prepayment invoice the VAT gets realized (and will show in the VAT Statement) and it is possible to receive the goods and post the invoice.

The same goes for sales prepayment invoices.

Hope this helps

docs.microsoft.com/.../finance-how-to-create-prepayment-invoices

docs.microsoft.com/.../finance-setup-unrealized-vat

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