The basic setup of the VAT Statement

This is what happens in the video

The VAT statement is the foundation for your VAT settlement in Business Central. It defines how VAT entries are grouped, totaled, and reported to the authorities. This article walks through how to set up a VAT statement and explains the difference between previewing and printing it.

The VAT statement preview shows you what will be settled per line, and you can drill down into the underlying VAT entries. The printed VAT statement collapses the lines into row totals, giving you the figures you report to the authorities.

Neither the VAT statement nor the preview posts anything or resets your VAT entries. The actual posting happens through the Calculate and Post VAT Settlement function.

How the VAT statement is structured

The VAT statement is built up with sales VAT first, then purchase VAT. In the sales VAT section, we include all acquisition tax with reverse charge, and we do the same in the purchase VAT section.

The statement is defined with columns and lines that determine how the VAT is settled afterwards. Each line is set up using the General Posting Type, the VAT Business Posting Group, and the VAT Product Posting Group, along with combinations of these. In the statement lines, you can see all the different combinations of the posting groups.

Reporting duties and taxes through VAT entries

If you scroll down past the sales and purchase sections, you find all the duties and taxes. These are also set up with a product posting group and a business posting group, so they can be reported automatically.

The VAT settlement is generated from the VAT entries, so setting up duties and taxes this way is a method to create VAT entries for them as well.

Reporting the base amount

At the bottom of the VAT statement, you find the additional information or base amount that needs to be reported. Some countries require you to report the base amount that the VAT is calculated from. This is set up in the end section of the VAT statement.

The difference between preview and statement

There are two ways to view the VAT statement, and they serve different purposes.

From the Process tab, you can run a preview. The preview displays all the lines you actually have in your VAT statement. You can look at how it will turn out and drill down into all your entries. For example, on the combination of domestic and VAT 25, you can drill into your VAT entries and see what will be settled when you calculate. Here you also see all the open VAT entries.

The preview shows, per line, exactly what is going to happen.

From the Report tab, you run the VAT statement itself, which you can print. This is the report you would normally print to a PDF or to screen when doing your reporting. When you print, the lines are collapsed into row totals. So instead of multiple lines, you get a single line for sales VAT 25%, for instance, along with all the base amounts at the bottom.

If you set an ending date, for example for last year, and preview the statement, you get the same report as when you select print. This displays exactly what you need to report to the authorities, collapsed per line.

Neither preview nor statement posts anything

Both the printed VAT statement and the preview are read-only. They do not perform any posting, and they do not reset your VAT entries.

The actual posting is done with the Calculate and Post VAT Settlement function, which resets your finance with those VAT entries. That process is covered separately.

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