VAT for Gifts, Samples, and Prizes (OP)

Within Order Processing, you can specify that a line item should be a gift , sample, or prize by indicating that the pricing method is "no charge."  In some cases, VAT must be calculated for the value of the gift, even though it is free.  You can decide whether or not you wish to charge that tax to the customer.  If you charge the customer for the VAT, the VAT amount is posted to the Accounts Receivable account and to the appropriate VAT Payable account.  VAT can be calculated at both the Sales Order Header or the Sales Order Line levels.

During Sales Order, Shipment, or Postbilling processing, you can enter a part sales order message code on each sales order line.  If the message code is entered on a line where the pricing method is ‘no charge’ (price code = 8), then Reference File category M10 will be retrieved.  If a record exists for the company/location/part sales order message code combination, then the Calculate VAT flag on this category will be defaulted to the VAT on Gift flag on the sales order line.  If a record does not exist, then the VAT on Gift flag will default from the Sales Order Header.  The VAT on Gift flag will then be used to determine whether or not VAT should be calculated for the gift, sample or prize sales order line.

For orders that will have VAT calculated for every gift line type, set the VAT on Gift flag on the Sales Order Header to ‘Y’ to speed the processing.

On each sales order header, you can specify whether the customer should be charged VAT for any gifts on that order.  This value defaults from the Customer Master File.  Note that the sales order header flag applies to the entire order--you cannot charge VAT for some gift lines on an order and not for others.  If you need to charge VAT only for some gift lines and not for others, do not use the header VAT on gift flag.  Instead, use the sales order distribution line VAT on gift flag, which overrides the header flag.  This flag defaults from Reference File category M10 if the line has an associated part message code defined on M10 and the price code is ‘8’ (no charge). It is possible to have gift lines and non-gift lines on the same sales order.