How to Post VAT Invoices

  • by Kees van Westerop, Senior SAP Consultant, Kwest Consulting
  • January 6, 2011
Normally the base amount for Value-Added Tax (VAT) and the VAT amount itself are part of the same invoice. The base amount is the amount for which the VAT is calculated. However, sometimes the base amount is missing on the invoice. This kind of invoice is called a VAT invoice. It concerns correction invoices and invoices related to imports. See how to enter VAT invoices by direct postings on the VAT general ledger accounts.

For most invoices, the Value-Added Tax (VAT) amount is together with the VAT base amount, on which the VAT is calculated. For example, suppose the VAT rate is 20 percent and a supplier charges €1000. On the purchase invoice, you would see a total amount of €1200, which is the sum of the base amount €1000 and the VAT amount of €200 (20 percent of €1000).

You might have to receive or send invoices with a VAT amount only. This can be because on the original invoice the VAT amount was incorrect or because an importer paid import duties on behalf of you and now the importer charges you the input duties. These import duties should be registered as VAT.

In older versions of SAP systems, it was a complex process to correctly register this kind of invoice. Since SAP R/3 4.7, it is much simpler to post a VAT invoice. As an example, I will charge a customer a VAT invoice for €200, with the VAT rate of 21 percent. The customer invoice is registered using transaction FB70.

Kees van Westerop

Kees van Westerop has been working as an SAP consultant for more than 25 years. He has an MBA degree in mathematics and a degree in finance. Kees has been concentrating on the financial modules, especially in general ledger accounting, cost center accounting, and consolidation. He also has a great deal of experience with rollouts of kernel systems and integrating finance and logistics.

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