I have read in forum that there is some solution for reverse charged VAT but i didn’t understand it how should it work.
At the moment I try to understand the logic but I don’t see the numbers.
What i do: 1 line - create a line with tax code FREE (0%); 2 line - create a line with account (VAT001) outside of balance in the same amount with tax code P and qty +1; 3 line - create a line with account (VAT002) outside of balance in the same amount with tax code P and qty -1.
But if I’m looking Tax Reports, then I can see there only one code “KM - vaba” - this mean VAT FREE (1. entered line) and all another information is hidden.
So my question is: do you have some recommendations how to solve it or should I need to prepare some short overview what kind of data we need?
Reverse charged VAT has no effect on your VAT payable so all you need is total purchases subject to reverse charged VAT and 0% tax code will serve that purpose.
By the fact it’s true. It will not affect VAT payable but by the law we need to add TAX and deduct TAX. Also the net amount of “Net Sales” and “Net Purchases” have to show it.
I know, that it’s the case in Estonia, Latvia, Lithuania and in Germany. Unfortunately I don’t know about it in other EU countries.
I think the simplest solution would be to enter the first line without any tax code and after that add 2 additional lines in the same amount on different accounts outside of balance, but the last or the first one will be with minus sign.
Still, use 0% tax code instead. I will probably add support for reverse charged tax so then you can edit 0% tax code you have created and make it “reverse charged tax” and everything will be shown correctly on your tax summary retrospectively.
