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Dynamics 365 Community / Forums / Small and medium business | Business Central, N... / Prepayment to Vendors ...
Small and medium business | Business Central, N...
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Prepayment to Vendors including VAT

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Posted on by StephenC58 45

I have implemented prepayments to vendors. 

  1. We have domestic vendors levying 13% VAT and 0% VAT for small turnover. I also have Imports which attract 0% VAT.
  2. The VAT product posting groups have been set-up and the prepayment G/L account VAT product group is also set at 0% VAT.

I can also toggle the item VAT between 0% and 13%.  However in order to be able to produce a prepayment invoice for the entire amount I have to change the vendor card setting to "prices include VAT". 

Is this the correct way to handle prepayments including VAT?

I have the same question (0)
  • Suggested answer
    Dirk Profile Picture
    Dirk on at

    Usually the design for prepayments is that the VAT % for the prepayment invoice always comes from the Prepayment G/L Account .

    That means that you need to have different Prepayment G/L Accounts for the different VAT criteria / VAT rates (in your case probably NATIONAL/13,  NATIONAL/0, IMPORT/0).

    The General Business Posting Group and the General Product Posting Group from the document line determine the line / the combination in the General Posting Setup from which the system know which of the three different Prepayment G/L Accounts arte to be taken for the prepayment invoice and it's prepayment VAT calculation.

    I think Prices Incl. VAT should not be used for this.

    Hope this helps

  • StephenC58 Profile Picture
    StephenC58 45 on at

    Dirk,

    Thanks. It gets me part way to a solution.

    I already created three G/L prepayment accounts.

    I also have 2 Gen Bus Posting Groups (Domestic and Imports) and 1 relevant Gen Product Posting Group (Items).

    Mapping Import/Items/0% to the Import Prepayment G/L OK

    Mapping Domestic/Items/0% to the Domestic 0% Prepayment G/L OK.

    It seems that without creating another Gen Bus Posting Group I have nowhere to map the Domestic 13% Prepayment.

    Am I missing something?

  • Verified answer
    Dirk Profile Picture
    Dirk on at

    I think you need one more General Product Posting Group to manage Domestic/Items/13%

  • Suggested answer
    StephenC58 Profile Picture
    StephenC58 45 on at

    Thanks.  It works :)

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