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Hi,
Anyone knows the implications of ticking or not this checkbox?
Thanks!
Hi CapsLock,
This enabled Reverse charge value added tax functionality. Please check here for more details.
Hello,
This works for reverse charge function.
In one word, if countries are using reverse charge function and config, without enabling this parameter the transaction directions won't be correct in sales tax reporting.
For which country/region do you need to setup reverse charge?
Best regards,
Ludwig
Just to share with you, what is reverse charge in business. In our normal business transactions, usually it is the responsibility of the seller to record VAT on their sales but in the reverse charge case we actually transfer this responsibility on the buyer side .
From D365 perspective, If you are in EU territory and enable this parameter along with other required setups which are mentioned on docs.microsoft.com/.../emea-reverse-charge
So when you will post any vendor invoice that has reverse charge associated with then system will create 02 seperate transactions. One will have sales tax payable tax direction and other will have sales tax receivable tax directions.
In nutshell, we apply reverse charge When goods are sold across borders within the EU territory.
Thank you all. I got the correct sales tax directions by setting up different VAT groups for purchases and sales. Also, activating that checkbox and following the rest of steps indicated in your link. Thanks!
Ludwig this was for Spain.
Hello Capslock,
I am wondering why Spanish customer want reverse charge?
Have you consulted with Spanish tax consultant fort his approach?
You may review this blog for Spanish Intra-community Tax approach.
community.dynamics.com/.../spanish-intra_2d00_community-vat-setup-in-microsoft-dyamics-365-finance-and-operations
Hi Ramit,
I have reviewed your post and it took me to the starting point. So for a Spanish company, I don't need to tick the check box for reverse charge that I was initially asking for because with the setup you describe we already get 2 VAT postings in each vendor invoice journal. A positive VAT posting and a negative one. Each with a different VAT direction.
When would then have to tick the reverse charge? what difference does it make?
thank you once again.
I can answer this in a very short way.
This enable reverse charge in GL parameter is for defaulting reverse charge
Check out this point in MS doc docs.microsoft.com/.../emea-reverse-charge
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