Imports and Exports

In general, VAT does not apply to imports or exports.  The only exception is when the goods are being transported between countries that both belong to the European Community.

Accounts Receivable

Within Accounts Receivable, each customer order and invoice must specify whether the customer is a home customer (VAT processing is performed) or an export customer (VAT processing is not performed). 

The home/export flag is specified on the header screens of the sales order and invoice entry conversations.  A default for each customer is defined on the Customer Master File.  In addition, you can define a system-wide default on Reference File category 300 (Accounts Receivable Defaults).  This default will be used when new customers are defined. 

Note that when the sourcing customer/warehouse and the customer are both located in EC member countries, the home/export flag should be set to H, since VAT must be calculated and reported in these cases.  An exonerated VAT type is used in these cases, since the VAT is not paid as part of the invoice.  For more information, refer to the VAT Calculations for EC Members section.

When a national customer is entered, he must be defined as a home customer; however, if he has subsidiaries in other EC countries where he can receive goods, he may be registered in those countries as well for the VAT exoneration.  If ESL/SSD processing is used, many different registration numbers can be entered for this customer through the EC VAT Information window available through the Customer Master Maintenance conversation.  For more information on this window, refer to the VAT Calculations for EC Members section in this key concept.

All other customers outside the EC should be defined as export customers.  However, the EC VAT Information window can still be requested for these customers since goods may be sent to an EC country at the export customer’s request.  If this export customer is not registered in that EC country, VAT must be charged by the selling company/warehouse since the goods are not exported from the EC.

Accounts Payable

Within Accounts Payable, you can specify the vendor type through the Vendor Master Maintenance conversation.  Types include normal (home) vendors, co-contractors, import vendors, shipping agents, and customs agents.  However, this field has no effect on VAT processing.  Within Purchasing/Accounts Payable, VAT is processed if you enter a VAT code for any line.  You will enter different VAT information depending on whether or not the item has been imported.  For example, if the line represents a local sale, you would enter a normal VAT code.  If the item has been imported from another European Community member state, you would enter a postponed VAT code.  For an import where VAT is not charged, you would leave the VAT code blank.

If you wish, you may use the normal (blank) and I (import) vendor types to distinguish between home and import vendors.  However, using these two vendor types will have no effect on processing.