Best practice for change in VAT rate, considering matching of purchase order invoices

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Posted on by Anette Jansson

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Hi,

As of January 1st there is a change of VAT rate from 20% to 22% in our Estonian company. I thought that the best practice way of handling it was to add a new value to the sales tax code.

But I do encounter an issue. If I have a purchase order and the vendor has issued an invoice in December, but we have closed the December books and need to take that invoice in on January. Then when I try to invoice match the invoice, the purchase order calculates with 22% VAT but on the invoice from the vendor is 20%. Then I cannot invoice match the invoice. Do I have to create another sales tax code and item sales tax group to handle this situation, or is there a viable work around?

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BillurSamdancioglu 19,854 Most Valuable Professional on at

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Hi,

You may do so or you may manually change the tax amount on the invoicing process but this depends on how you want to report.

Do you want to report this value under %22 tax code or %22 tax code?

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Anette Jansson 105 on at

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Well they are both reported on the same line in VAT declaration so it does not really matter. But I cannot change the VAT amount on the invoice from the vendor, can I manually change the VAT amount on the purchase order without changing item sales tax group or sales tax group?

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BillurSamdancioglu 19,854 Most Valuable Professional on at

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Hi,

You are able to change both in order and invoice.

Why can not change in invoice?

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Anette Jansson 105 on at

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Technically I can change, but I have received an invoice with a VAT amount from the vendor and that amount is the one I need to report to authorities, and pay to vendor.

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BillurSamdancioglu 19,854 Most Valuable Professional on at

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Yesi that is what I mean, you can change on the invoice by to use adjsutment field.

https://learn.microsoft.com/en-us/dynamicsax-2012/appuser-itpro/resolve-sales-tax-differences-between-purchase-orders-and-invoices

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