Import VAT recording presents a situation where you may need to post a document where the entire amount must be treated as VAT. For example, this is necessary, if you receive a VAT invoice from the tax authorities for imported goods.
Example
For example, a company imports goods and posts a purchase invoice (without VAT) for LCY 100,000.00. This purchase invoice is posted in the normal way, and the relevant line in the VAT posting setup specifies a VAT% of 0. Later, the company receives a VAT invoice from the tax authorities. The VAT invoice shows a calculated import VAT amount of 25% of the invoice amount = LCY 25,000.00. When the company pays this VAT invoice, it must be possible to create a VAT ledger entry where the VAT base is 0 and the VAT amount is LCY 25,000.00.
Setting up the G/L VAT Account and VAT Posting Setup
To record the import VAT, you must set up a new G/L VAT account, a VAT Product Posting Group, and a corresponding line in the VAT Posting Setup for this purpose. For more information on setting up codes for Import VAT, see How to: Set Up Codes for Import VAT.
Posting the Import VAT using Journals and Invoices
To post the Import VAT invoice in the example, you can use a journal or a purchase invoice.
For more information on posting the Import VAT invoice, see How to: Post Import VAT and How to: Post Import VAT with Purchase Invoices.