Reporting taxes - VAT
Value-Added Tax (VAT) is a tax on consumption that is paid by the end consumer. VAT is calculated on sales and purchases and reported to the tax authorities periodically.
Note
The general concepts of VAT are the same in all countries where VAT applies. Statement and VAT rates differ from country to country. This book is based on the Dynamics NAV worldwide (W1) database. Most Dynamics NAV country versions include localizations on VAT.
In Dynamics NAV, VAT is calculated on sales and purchases invoices and credit memos. When the documents are posted, new VAT entries are created that will be used later on to report VAT to the authorities.
VAT is calculated based on the combination of VAT Business Posting groups (the customer and vendor fix it) and VAT Product Posting groups (the items and services fix it).
In Chapter 1, The Sales and Purchase Process, we have posted the sales invoice number as 103023. Let's take a look at the VAT entries that were created while posting...
