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Microsoft Dynamics AX (Archived)

Posting a VAT only Invoice or Credit Note

Posted on by Microsoft Employee

Hi All, 

i need help in posting a VAT only Invoice or Credit Note in AX Dynamics 2012. How can this be done? Any help would be most appreciated. 

Kind regards. 

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  • Suggested answer
    Ludwig Reinhard Profile Picture
    Ludwig Reinhard Microsoft Employee on at
    RE: Posting a VAT only Invoice or Credit Note

    Hi Hamza Sheikh,

    The issue with European VAT is that companies are responsible and liable for the VAT that is shown on the invoice document even it is wrong. To correct this, the VAT laws available in the European countries I was mainly working with require issuing a credit note and a correction invoice. I do not know exactly for the UK but assume that the same rules apply there as in my home country Germany.

    For that reason, companies need to go the sometimes painful and time consuming way to generate the credit note and the correction invoice that need to be send to customers for their records. The only shortcut I can think of in the standard application is using the free text invoice form with all the advantages and disadvantages that this brings.

    You can of course directly post a VAT correction from one tax code to the other through a GL Journal. The issue with this way of making the correction is that you need to inform your customer about this correction and send the customer some correction documents, which would require a system adjustment to get the invoice & credit note documents out of AX.

    The important thing is to get the tax setup right in the first place to reduce the number of corrections that need to be made. Probably this is something where you can do some deeper investigation as you seem to face this issue often. Can you classify the problematic tax cases that regularly require you making corrections somehow?

    Best regards,

    Ludwig

  • Community Member Profile Picture
    Community Member Microsoft Employee on at
    RE: Posting a VAT only Invoice or Credit Note

    Hi Ludwig, 

    Currently we have to issue a credit note and re do the entire invoice at the correct VAT rate. This is a time consuming and lengthy exercise as there are potentially lots of corrections we need to do.  We need something which will allow us to post VAT only credit notes with out any net amounts etc.  

    i am not quite sure about our Tax setup it was done via an AX Partner who we are no longer in touch with hence why i am asking here. 

  • Ludwig Reinhard Profile Picture
    Ludwig Reinhard Microsoft Employee on at
    RE: Posting a VAT only Invoice or Credit Note

    HI Hamza Sheikh,

    A tax only posting can be realized through a journal where you select the tax code for which you need a correction.

    This option is only available for internal transactions.

    If you need to create a credit note for a customer, you can't select the tax code directly and consequently need to create a proper credit note and new correction invoice.

    Can you let us know why you spend a lot of time for tax corrections? This indicates that something in your tax Setup might not be correct.

    Best regards,

    Ludwig

  • Ruben Heinrich Profile Picture
    Ruben Heinrich 631 on at
    RE: Posting a VAT only Invoice or Credit Note

    100% Tax Group. So the whole amount is accounted to the tax Offset acount. but i am not a financer

  • Community Member Profile Picture
    Community Member Microsoft Employee on at
    RE: Posting a VAT only Invoice or Credit Note

    Please explain?

  • Community Member Profile Picture
    Community Member Microsoft Employee on at
    RE: Posting a VAT only Invoice or Credit Note

    so there is no way of just raising a 0 value but GBP100.00 vat credit note? We are spending a lot of time reversing invoices and re doing invoices when the only thing wrong is the VAT amount.

  • Ruben Heinrich Profile Picture
    Ruben Heinrich 631 on at
    RE: Posting a VAT only Invoice or Credit Note

    wouldn you have to create a Tax Group with 100% and then credit exactly that amount with that tax group so it is in the correct account?

  • Suggested answer
    Ludwig Reinhard Profile Picture
    Ludwig Reinhard Microsoft Employee on at
    RE: Posting a VAT only Invoice or Credit Note in AX Dynamics 2012

    Hi Hamza Sheikh,

    Can't you just create a free text credit note with the very same sales tax group & item sales tax group used for the original invoice but a negative amount included?

    This is possibly the fastest and simplest way to get this corrected without influencing your inventory.

    (Please keep in mind that if the original invoice was related to a sales order, you won't have a link established between the free text credit note and the sales order)

    Best regards,

    Ludwig

  • Community Member Profile Picture
    Community Member Microsoft Employee on at
    RE: Posting a VAT only Invoice or Credit Note in AX Dynamics 2012

    shouldnt*

  • Community Member Profile Picture
    Community Member Microsoft Employee on at
    RE: Posting a VAT only Invoice or Credit Note in AX Dynamics 2012

    Hi Ludwig,

    It is implemented for the UK. Well we have charged a customer VAT when we should have charged them VAT. We therefore need to adjust our ledgers accordingly, i wanted to do a credit note to the customer for just the VAT

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