https://localizations.manager.io/summary-view?FileID=VW5pdGVkIEFyYWIgRW1pcmF0ZXM

[image] Ealfardan: There’s one thing that’s weird though. The tax code “Adjust VAT DXB 5%” was used in a credit note, but somehow appears in the purchases section of the Tax Summary report. Can you select Customer on credit note? It appears credit note has no customer selected.

[image] lubos: It appears credit note has no customer selected. That’s right. All good now.

How does tourist VAT refund actually work? You issue invoice, charge VAT and then remove VAT from invoice because customer is not charged? Why not set up this tax code as reverse charged? [image]

[image] lubos: Why not set up this tax code as reverse charged? But both parts of the transaction are sales? Could I use reverse charged for that or just multi-component tax codes?

Let’s see. When I create the report for single sale which includes tax refund for tourist scheme. I come to total sales as 0.00. But I believe total sales is still 100.00. Can you clarify why you make total sales to be 0.00 on the report? [image]

[image] lubos: Let’s see. When I create the report for single sale which includes tax refund for tourist scheme. I come to total sales as 0.00. But I believe total sales is still 100.00. Can you clarify why you make total sales to be 0.00 on the report? It’s a passthrough tax code so you can just enter the refund amount without having to duplicate the tax base.

I understand. That’s how you made it… but why you insist this tax code must reduce total sales (field 8) on VAT report?

[image] lubos: but why you insist this tax code must reduce total sales (field 8) I don’t insist on anything. :grin: It’s a reduction in taxable sales not necessarily a reduction in total sales. Also, I tried to get a decent screenshot of the UAE Tax return but I couldn’t so I logged in and took a screenshot of the voluntary disclosure form – which is the next best thing: [image] Note that for item 2 near the end, there are two rows: (1) As reported (locked) and, (2) as current open for entry. It has a negative sign next to both the Amount and VAT Amount cells.

OK, the way I see it is that each emirate needs reverse charge tax code for the purpose of tourist VAT refund. There is no need for javascript as every field can be calculated with simple additions of reporting categories. So reverse charge VAT tax code for one of the emirates would look like this: [image] And the report transformation: [image] And in sales totals we do not show tourist refund reporting categories at all as they do not have any impact on the total. [image] When issuing invoice, we do not need 2 line items to handle this. Just one line item with correct tax code: [image]

That will also work, but regarding your earlier point. [image] lubos: I come to total sales as 0.00. But I believe total sales is still 100.00. You are right. It is going to reduce total sales since the Tax return contains all categories of sale: Taxable and Exempt. (Sorry for being so slow to understand) I have tested the voluntary disclosure form and it turns out that this item indeed reduces the total: Totals Before Refund [image] Refund [image] Totals After Refund [image] So I think the tax base for a tax refunded transaction should be as follows: Taxable sales recorded at item’s appropriate tax code (+100) Tax refund effect on taxable sales (-100) Restatement of taxable sales @ VAT 0% (+100) Net effect on sales would be (+100). That should ensure that both the tax and total sales amount are reported correctly.

United Arab Emirates

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United Arab Emirates

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