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 Tax) for $ 100,000.00. This purchase invoice is posted in the normal way, and the relevant line in the Tax posting setup specifies a Tax% of 0. Later, the company receives a Tax invoice from the tax authorities. The Tax invoice shows a calculated import Tax amount of 25% of the invoice amount = $ 25,000.00. When the company pays this Tax invoice, it must be possible to create a Tax ledger entry where the Tax base is 0 and the Tax amount is $ 25,000.00.
Setting up the G/L Tax Account and Tax Posting Setup
To record the import Tax, you must set up a new G/L Tax account, a Tax Product Posting Group, and a corresponding line in the Tax Posting Setup for this purpose. For more information on setting up codes for Import Tax, see How to: Set Up Codes for Import Tax.
Posting the Import Tax using Journals and Invoices
To post the Import Tax invoice in the example, you can use a journal or a purchase invoice.
For more information on posting the Import Tax invoice, see How to: Post Import Tax and How to: Post Import Tax with Purchase Invoices.