Is it possible to post VAT only supplier invoice?

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Posted on by mumuthu

Is it possible to post VAT only supplier invoice using Supplier invoice form? We receive VAT only invoice relating to import. I know it is possible to post VAT only invoice using Invoice journal by populating VAT group, Item VAT group, and VAT code fields. I would like to find out whether it can also be achieved using Supplier invoice form. I work for a company in UK.

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Financial Management

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Sten Baumgarten 12 on at

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Hi Mumuthu

Do you receive an invoice when you make an import?

If yes i guess you have to pay the invoice to the authorities?

Can you get the import invoice amount refunded from the authorities?

If yes, to get the refund, do you have to include the import amount when you report vat to the authorities?

If yes, i will create a vat code for that purpose and include the code when you post the import invoice. Debit can be in P&L or balance and credit a seperat main account in the part of your vat main account.

Kind regards

Sten
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Ludwig Reinhard Microsoft Employee on at

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Hi mumuthu,

In the past I often received invoices from DHL, UPS, Fedex that included some tax amounts that we directly had to pay.

To get them posted correctly you have to enter the tax code directly into the tax code field - no need to enter the VAT group / item VAT group fields.

As account, you have to select the tax account directly. What I posted were regularly import taxes or something alike for which we used a separate account. This is the account that you have to select in the journal.

Please test in a demo/test version first and carefully check the voucher.

Best regards,

Ludwig
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André Arnaud de Cal... 307,157 Super User 2026 Season 2 on at

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Hi Mumuthu,

I concur with Ludwig. The procedure to fill the Tax code directly works in invoice and general journals. You have to check also settings on the main account. Do not set the option to block manual posting. The Posting type should be set to 'Sales tax'. This will prevent using this account manually without the Tax code. As result, it will create a Tax transaction with the full amount as Tax amount which then can also be included on Sales tax reporting.
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Eugen Glasow 6,363 on at

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I have seen a crazy solution once. We also needed to post the invoice from the customs broker, and we did not want to divert the process flow to GL journals because of all the good workflows and OCR built around the Pending supplier invoices. A colleague of mine activated the Tax included mode and created a tax code with the % of 9999999999. Ingenious, isn't it?
mumuthu on at

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Hello Ludwig,

Thanks for your response.

Am I right to think, the above noted steps are to post VAT only invoice via Supplier invoice journal and General journal? As tax (VAT) code field is not available in Pending supplier invoice form.

Regards

Muthu
mumuthu on at

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Thanks Eugen for you response.

Yes, it is an ingenious way, and it works as expected. Do you know why VAT (tax) code is set to 9999999999 for this to work? It would be interesting to know.

I followed the steps below to post VAT only invoice via Pending supplier invoice form in AX2012 environment:

Amended VAT code: 100% > Value to 9999999999

Created a new Pending supplier invoice

In Header view > Setup fast tab > Set Prices include VAT field to TRUE

Entered Procurement category line

In Line details, I selected values Item VAT group and VAT group fields that would result in VAT code: 100% selected by the system.

In Totals form, I only have VAT field populated and Subtotal amount field is 0 as expected

Successfully posted Pending supplier invoice.

Posted VAT entry only contains VAT amount and Amount origin is 0 as expected.

Only minor downside to this method is, it creates an additional Voucher transaction for 0 amount.
Eugen Glasow 6,363 on at

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Well, it's the pure math:

(Origin*100% + Origin*Tax%)/100% = LineAmount

Origin = LineAmount /(1+Tax%/100)

Lim(Origin, Tax% --> inf) = 0
mumuthu on at

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I have to refresh my memory on Lim mathematics function, but it appears to make sense.

As I was testing further, I came across the following limitations. Although unlikely for VAT only invoice to have such a large invoice amount but something to consider I suppose.

If VAT Code set to 9,999,999,999.00 then maximum Invoice amount is £500,000.00

If VAT Code set to 99,999,999,999.00 then maximum Invoice amount is £5,000,000.00. Refer to example below.

Anything over this limit will add a value to Invoice Net amount which is not desirable.

So, am I right to think there is no standard option (excluding the above workaround) available to achieve VAT only Pending supplier invoice in AX/D365? Similar to posting VAT only supplier invoice using journal.

Thanks for your help.
Eugen Glasow 6,363 on at

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Of course, the maximal precision you can achieve is LineAmount/Tax%/100 <= 0,01 where 0,01 is the rounding in the GL.

Consequently, LineAmount <= Tax%

How probably is it, to receive an import duty or import VAT of 5 mio GBP? Is your customer a high volume, low margin manufacturer or reseller?
mumuthu on at

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It is unlikely for my customer to receive £5m import VAT. I just testing with few sample numbers.