Value Added Tax Type/Goods and Services Tax Type

The Value Added Tax (VAT) type and Goods and Services Tax (GST) type field indicates how the system processes a VAT or GST code.  The system assigns each VAT or GST code a type when it is defined in Reference File category 230 (Accounts Payable codes) and category 308 (Accounts Receivable codes).  There are six tax types for both VAT and GST codes.  The character used to identify each of the types is specified on Reference File category 024.  Note: the default is "Normal" processing (blank type code).

The six types are:

• Exonerated VAT or GST.  The customer never needs to pay VAT or GST for items purchased with this type of VAT or GST code.
• Suspended VAT (not valid for GST).  The customer does not need to pay VAT for an item until a given sales amount or date has been reached.
• Partially recoverable (not valid in GST environment.)  Only a portion of the VAT amount paid in Accounts Payable can be claimed from the tax authorities.
• Not recoverable (not valid in GST environment.)  None of the VAT you have paid to the vendor can be claimed from the tax authorities.
• Normal.  The system calculates VAT or GST for all purchases or orders, according to the specified rate.
• Postponed (not valid in GST environment.)  Postponed VAT is used in Accounts Payable for imported goods when both vendor and receiving company/warehouse are located in European Community countries and the receiving company/warehouse is registered with the tax authority.