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Small and medium business | Business Central, N...
Answered

Handling Different Purchase & Sales VAT Rates

Posted on 5 May 2023 11:53:39 by 10

Hi all,

I have what I believe is a simple question, but just want to validate that I'm not missing an option that would simplify our VAT Posting Setup.

So we have a VAT Posting Setup combination of EUNV (EU Non-VAT Registered) + STANDARD (standard-rated goods). Against this combination we have set the standard Dutch VAT rate of 21%.

This is correct when we sell goods under this combination (as we are VAT-registered and would therefore apply 21% VAT); however, when buying standard-rated goods from a non-VAT registered supplier (i.e. one that has the "EUNV" VAT Bus. Posting Group), we would not be charged VAT.

As we cannot specify separate sale and purchase VAT rates for a single VAT Posting Setup entry, is the only way to handle this scenario to create separate VAT Bus. Posting Groups for non-VAT registered EU companies - e.g. "EUCNV" for customers, and "EUVNV" for vendors? Then we could have separate VAT Posting Setup entries, each with the appropriate VAT % applied?

Any thoughts appreciated. In case it's relevant, we use the GB version of Business Central, version 21.5.

Simon

  • S Bell Profile Picture
    S Bell 10 on 05 May 2023 at 12:17:36
    RE: Handling Different Purchase & Sales VAT Rates

    Thanks for the quick response Rahul.

  • Verified answer
    NAV_with_Narang Profile Picture
    NAV_with_Narang 2,236 Super User 2024 Season 1 on 05 May 2023 at 12:12:49
    RE: Handling Different Purchase & Sales VAT Rates

    Hi Simon - After reading your case, I'd say "YES" to all the questions you've asked, that's the correct way

    You can change these VAT Bus & VAT Product posting groups on the invoice itself, thus changing your VAT % per transaction if the default values are not suitable for that invoice

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