Oracle EBTax UK VAT Setup Examples

In the United Kingdom, Value Added Tax (VAT) is a tax on consumer expenditure that is charged on most business transactions made in the United Kingdom and the Isle of Man. VAT is also charged on goods and some services imported from places outside the European Union, and on goods and some services coming into the United Kingdom from the other European Union countries.

The current rates for VAT are:

  • Standard rate of 17.5%.
  • Reduced rate of 5% for certain goods and services, such as domestic fuel and energy saving materials.
  • Zero rate.


Some goods and services are exempt from VAT. In addition, there is a zero rate for United Kingdom companies that supply goods and services to VAT-registered customers in other European Union Member States, provided the company meets the appropriate conditions.

The example in this section is based on the Customs and Excise Management Act 1979.

Setup Features

This tax setup example is for a first party registered in the United Kingdom and dealing with domestic, intra-EU and extra-EU transactions. Setup features include:

  • There are five possible tax statuses for VAT: standard, reduced, exempt, zero, and Intra-European Union zero. The Intra-European Union zero status came into effect in 2000. There is a separate tax status record for each tax status. All records have the same tax regime code, configuration owner, and tax, as well as the same default controls.   
                         Although you do not need to report exempt transactions, this example illustrates the creation of a specific Exempt tax status (with associated zero rate) to allow simple identification for reporting or audit purposes. The separate Intra-European Union zero status also allows for easy identification and reporting.
  • A company of this kind can normally recover 100%, with standard exceptions where 0% recovery is permitted.
  •  The setup uses tax rules rather than tax exceptions to define exempt and reduced rate goods.
  •  The setup uses tax rules rather than tax exemptions to define exempt customers, such as diplomatic and military customers.
  •  The exchange rate type is User, to take into account the different options available to the company for expressing foreign currency transactions.


Inventory Category Sets and Category Codes

These Inventory category codes are used to identify goods and services for use in tax rules.

See: Setting Up Oracle Inventory for information about creating Inventory item categories for product fiscal classifications.

 

Inventory Category Sets and Category Codes
Category SetStructure NameCategory CodeDescription
GB VAT PRODUCT CLASSIFICATION Fiscal Classification GBG01 Goods
GB VAT PRODUCT CLASSIFICATION Fiscal Classification GBG0100 Normal Rated Goods
GB VAT PRODUCT CLASSIFICATION Fiscal Classification GBG0101 Zero Rated Goods
GB VAT PRODUCT CLASSIFICATION Fiscal Classification GBG0102 Exempt Goods
GB VAT PRODUCT CLASSIFICATION Fiscal Classification GBG0103 Reduced Rate Goods
GB VAT PRODUCT CLASSIFICATION Fiscal Classification GBS01 Services
GB VAT PRODUCT CLASSIFICATION Fiscal Classification GBS0100 Normal Rated Services
GB VAT PRODUCT CLASSIFICATION Fiscal Classification GBS0101 Zero Rated Services
GB VAT PRODUCT CLASSIFICATION Fiscal Classification GBS0102 Exempt Services
GB VAT PRODUCT CLASSIFICATION Fiscal Classification GBS0103 Reduced Rate Services
GB VAT RECOVERY Fiscal Classification GBR00 Normal Recovery
GB VAT RECOVERY Fiscal Classification GBR01 Zero Recovery
  Intended Use GB Linked to Exempt Sale GB Linked to Exempt Sale

Party Tax Profile: Tax Authority

You first set up the United Kingdom tax authority--HM Revenue and Customs--as a legal authority using the Oracle Legal Entity Manager, and then create a party tax profile for the legal authority.

Legal Authority
FieldValue
Organization Name HM Revenue and Customs
Legislative Category Transaction Tax
Country United Kingdom
Address1 VAT Central Unit Alexander House
City Southend-on-Sea
Postal Code SS99 1AA
Status Active
Primary Address Yes
Tax Authority
FieldValue
Party Type Tax Authority
Party Name HM Revenue and Customs
Address VAT Central Unit, Alexander House, Southend-on-Sea, Essex, SS99 1AA
Country Name United Kingdom
Set as a Collecting Authority Yes
Set as a Reporting Authority Yes

Tax Zones

The tax zone type European Economic Regions contains a tax zone record for each country in the European Union. The setup values are the same for each country, except for the Geography Name field.

FieldValue
Tax Zone Name European Economic Community
Tax Zone Code EU
Start Date 01-Jan-05
Tax Zone Type Economic Regions
Code Type Tax Geography Code
Geography Type Country
Geography Name Austria
  Belgium
  ...
  United Kingdom

Tax Regime Setup

FieldValueFieldValue
Main Information      
Tax Regime Code GB VAT Country Name United Kingdom
Name GB VAT Effective From 18-Jun-1979
Regime Level Country Used to Group Regimes No
Controls      
Allow Tax Recovery Yes Allow Tax Exemptions No
Allow Override and Entry of Inclusive Tax Lines Yes Allow Tax Exceptions No
Defaults      
Tax Currency GBP Exchange Rate Type User
Minimum Accountable Unit .01 Reporting Tax Authority HM Revenue and Customs
Rounding Rule Nearest Collecting Tax Authority HM Revenue and Customs
Tax Precision 2 Default Recovery Settlement Immediate
Allow Tax Inclusion Standard Non-Inclusive Handling Use Legal Registration Number No
Allow Multiple Jurisdictions No Allow Cross Regime Compounding No
Allow Tax Rounding Override Yes    
Configuration Options (if defined from tax regime)      
Party Name Party name Configuration for Product Exceptions Common Configuration
Configuration for Taxes and Rules Common Configuration Effective From 18-Jun-1979

Tax Setup

FieldValueFieldValue
Main Information      
Tax Regime Code GB VAT Tax Currency GBP
Configuration Owner Global Configuration Owner Minimum Accountable Unit .01
Tax Source Create a new tax Rounding Rule Nearest
Tax GB VAT Tax Precision 2
Tax Name GB VAT Exchange Rate Type User
Tax Type VAT Reporting Tax Authority HM Revenue and Customs
Effective From 18-Jun-1979 Collecting Tax Authority HM Revenue and Customs
Geography Type Country Applied Amount Handling Recalculated
Parent Geography Type Country Set as Offset Tax No
Parent Geography Name United Kingdom Set Tax for Reporting Purposes Only No
Controls      
Allow Tax Inclusion Standard Non-Inclusive Handling Allow Entry of Manual Tax Lines Yes
Allow Override and Entry of Inclusive Tax Lines Yes Use Legal Registration Number No
Allow Tax Rounding Override Yes Allow Duplicate Tax Registration Numbers No
Allow Override for Calculated Tax Lines Yes Allow Multiple Jurisdictions No
Tax Account Controls      
Tax Accounts Creation Method Create Tax Accounts    
Tax Recovery Controls      
Allow Tax Recovery Yes Primary Recovery Type Standard
Allow Tax Recovery Rate Override Yes Default Primary Recovery Rate Code (Update page) GB VAT STANDARD REC RATE
Allow Primary Recovery Rate Determination Rules Yes Allow Tax Rate Rules No
Allow Secondary Recovery Rate Determination Rules No Default Recovery Settlement Immediate

Tax Status Setup

FieldValueFieldValue
Main Information      
Tax Regime Code GB VAT Tax GB VAT
Configuration Owner Global Configuration Owner Tax Name GB VAT
Standard Status      
Tax Status Code GB VAT STANDARD Effective From 18-Jun-1979
Name GB VAT Standard Set as Default Tax Status Yes
Reduced Status      
Tax Status Code GB VAT REDUCED Effective From 18-Jun-1979
Name GB VAT Reduced Set as Default Tax Status No
Exempt Status      
Tax Status Code GB VAT EXEMPT Effective From 18-Jun-1979
Name GB VAT Exempt Set as Default Tax Status No
Zero Status      
Tax Status Code GB VAT ZERO Effective From 18-Jun-1979
Name GB VAT Zero Set as Default Tax Status No
Intra EU Zero Status      
Tax Status Code GB VAT INTRA EU ZERO Effective From 1-Jan-2000
Name GB VAT Intra EU Zero Set as Default Tax Status No
Default Controls (all statuses)      
Allow Tax Exemptions No Allow Tax Rate Override Yes
Allow Tax Exceptions No Default Recovery Settlement Immediate

Tax Jurisdiction Setup

This setup is for the one tax jurisdiction--the United Kingdom--for GB VAT.

FieldValue
Tax Jurisdiction Code GB VAT
Tax Jurisdiction Name GB VAT
Tax Regime Code GB VAT
Tax GB VAT
Geography Type Country
Parent Geography Type Country
Parent Geography Name United Kingdom
Geography Name United Kingdom
Inner City Jurisdiction N/A
Precedence Level N/A
Collecting Tax Authority HM Revenue and Customs
Reporting Tax Authority HM Revenue and Customs
Effective From 18-Jun-1979
Set as Default Tax Jurisdiction Yes
Default Effective From 18-Jun-1979

Tax Recovery Rate Setup

This example illustrates setup for the VAT recovery rates of standard and zero.

In some instances you may also need to set up a partial rate. A company's actual rate for partial recovery will depend on the combination of its taxable and exempt statuses, as agreed upon with HM Revenue and Customs.

FieldValueFieldValue
Main Information      
Tax Regime Code GB VAT Tax GB VAT
Tax Regime Name GB VAT Tax Name GB VAT
Configuration Owner Global Configuration Owner Recovery Type Standard
Standard Rate      
Tax Recovery Rate Code GB VAT STANDARD REC RATE Set as Default Rate Yes
Percentage Recovery Rate 100 Default Effective From 18-Jun-1979
Effective From 18-Jun-1979 Allow Ad Hoc Rate N/A
Zero Rate      
Tax Recovery Rate Code GB VAT ZERO REC RATE Set as Default Rate No
Percentage Recovery Rate 0 Allow Ad Hoc Rate N/A
Effective From 18-Jun-1979    

Tax Rate Setup

This example shows the standard VAT rate. There are two rate periods to reflect the rate change After March 1991.

FieldValueFieldValue
Main Information      
Tax Regime Code GB VAT Tax Status Name GB VAT Standard
Tax Regime Name GB VAT Tax Rate Code GB VAT STANDARD RATE
Tax GB VAT Configuration Owner Global Configuration Owner
Tax Name GB VAT Rate Type Percentage
Tax Status Code GB VAT STANDARD    
Rate Period 1      
Percentage Rate 15 Default Effective From 18-Jun-1979
Effective From 18-Jun-1979 Default Effective To 31-Mar-1991
Effective To 31-Mar-1991 Allow Tax Inclusion Standard Non-Inclusive Handling
Default Recovery Rate Code GB VAT STANDARD REC RATE Allow Override and Entry of Inclusive Tax Lines No
Recovery Type STANDARD Allow Ad Hoc Rate No
Default Recovery Settlement Immediate Adjustment for Ad Hoc Amounts Taxable Basis
Set as Default Rate Yes    
Rate Period 2      
Percentage Rate 17.5 Default Effective From 1-Apr-1991
Effective From 1-Apr-1991 Allow Tax Inclusion Standard Non-Inclusive Handling
Default Recovery Rate Code GB VAT STANDARD REC RATE Allow Override and Entry of Inclusive Tax Lines Yes
Recovery Type STANDARD Allow Ad Hoc Rate No
Default Recovery Settlement Immediate Adjustment for Ad Hoc Amounts Taxable Basis
Set as Default Rate Yes    

Party Tax Profile Setup

FieldValueFieldValue
First Party Legal Entity      
Party Type First Party Legal Entity Country Name United Kingdom
Party Name Party name    
Main Information      
Set for Self Assessment/Reverse Charge Yes Rounding Rule Nearest
Rounding Level Header Set Invoice Values as Tax Inclusive No
Configuration Options (if defined from party tax profile)      
Tax Regime Code GB VAT Configuration for Product Exceptions N/A
Configuration for Taxes and Rules Common Configuration Effective From 18-Jun-1979
 
FieldValueFieldValue
First Party Legal Establishment      
Party Type First Party Legal Establishment Country Name United Kingdom
Party Name Party name    
Tax Registration      
Tax Regime Code GB VAT Tax Registration Reason REVENUE_THRESHOLD
Tax GB VAT Effective From 1-Jan-1991
Tax Registration Number GB123456789 Rounding Rule Nearest
Set as Default Registration Yes Set Invoice Values as Tax Inclusive No
Tax Registration Status REGISTERED Set for Self Assessment/Reverse Charge Yes
Source Explicit    

Product Inventory Fiscal Classifications

This example shows the setup for Inventory-based product fiscal classifications. These fiscal classifications are used in the creation of tax rules for the tax GB VAT.

GB VAT PRODUCT CLASSIFICATION
Fiscal Classification Type CodeStart PositionNumber of CharactersProduct Classification SourceEffective From
GB VAT PRODUCT LEVEL 1 1 5 Inventory 18-Jun-1979
GB VAT PRODUCT LEVEL 2 1 7 Inventory 18-Jun-1979
GB VAT RECOVERY
Fiscal Classification Type CodeStart PositionNumber of CharactersProduct Classification SourceEffective From
GB VAT RECOVERY 1 5 Inventory 18-Jun-1979

Product Intended Use Fiscal Classifications

This example shows the setup for an Inventory-based product intended use fiscal classification type. This fiscal classification type is used in the creation of tax rules for the tax GB VAT.

Fiscal Classification Type CodeEffective FromInventory Category SetFiscal Classification CodeCountry Name
INTENDED_USE 18-Jun-1979 INTENDED_USE GB Linked to Exempt Sale United Kingdom

Tax Rule Defaults

This example shows the default values that are entered for each rule type for the creation of tax rules for the tax GB VAT. In tax rules, the default value is the most commonly expected result. E-Business Tax uses this value on a transaction when there are no rules that determine another result.

Default Values for GB VAT Tax Rules
Rule TypeDefault Value
Determine Place of Supply Ship From
Determine Tax Applicability Applicable
Determine Tax Registration Bill From Party
Determine Tax Status GB VAT STANDARD
Determine Tax Rate GB VAT STANDARD RATE
Determine Taxable Basis STANDARD_TB
Calculate Tax Amounts STANDARD_TC

Tax Determining Factor Sets

This example shows tax determining factor sets that are used to create tax rules for the tax GB VAT. There is one determining factor set per rule type. Each determining factor set contains all the determining factors necessary to create tax conditions for the corresponding tax rule.

None of the determining factors in these sets are set as Required.

GB VAT REGISTRATION
Determining Factor ClassClass QualifierDetermining Factor Name
User Defined Geography Ship From Economic Regions
Geography Ship From Country
Geography Ship To Country
Transaction Input Factor   Product Type
Registration Bill From Party Registration Status
Transaction Generic Classification   Transaction Business Category
GB VAT Place of Supply
Determining Factor ClassClass QualifierDetermining Factor Name
User Defined Geography Ship From Economic Regions
Geography Ship From Country
User Defined Geography Bill From Economic Regions
Geography Ship To Country
Transaction Input Factor   Product Type
Registration Bill From Party Registration Status
Transaction Generic Classification   Transaction Business Category
GB VAT Applicability
Determining Factor ClassClass QualifierDetermining Factor Name
Transaction Input Factor   Product Type
Geography Ship From Country
Geography Ship To Country
Geography Bill From Country
Geography Bill To Country
Registration Bill From Party Registration Status
GB VAT Status
Determining Factor ClassClass QualifierDetermining Factor Name
Geography Ship From Country
User Defined Geography Ship To Economic Regions
Geography Ship To Country
Transaction Input Factor   Product Type
Product - Inventory Based   GB VAT Product Level 2
Registration Bill From Party Registration Status
Registration Bill To Party Registration Status
Transaction Generic Classification   Transaction Business Category
GB VAT Recovery Rate
Determining Factor ClassClass QualifierDetermining Factor Name
Product - Inventory Based   GB VAT Recovery
Transaction Input Factor   Intended Use

Tax Condition Sets

These examples show the tax condition sets that are used to create tax rules. Each tax condition set makes use of one of the tax determining factor sets created for tax rules for the tax GB VAT. The tax condition sets in these examples only show the determining factors that are actually used to create tax conditions; the other determining factors in the tax determining factor set (if any) are considered to be set to Ignore Condition.

GB Intra EU Goods Purchase and Reverse Charge

This example uses two tax condition sets to process a purchase by a UK customer from a supplier in an EU country, and to determine a standard reverse charge on the goods shipped from an EU country to the UK. The UK customer is GB VAT registered, but the supplier is non-GB VAT registered.

The tax condition set GB INTRA EU GOODS PURCHASE uses the tax determining factor set GB VAT PLACE OF SUPPLY in the Determine Place of Supply rule. The tax condition set GB GOODS PURCHASE REVERSE CHARGE uses the tax determining factor set GB VAT REGISTRATION in the Determine Tax Registration rule.

GB INTRA EU GOODS PURCHASE
Determining Factor ClassClass QualifierDetermining Factor NameOperatorValue
User Defined Geography Ship From Economic Regions Equal To European Economic Community
Geography Ship From Country Not Equal To United Kingdom
Geography Ship To Country Equal To United Kingdom
Transaction Generic Classification   Transaction Business Category Equal To Purchase Transaction
Registration Bill From Party Registration Status Equal To Registered in EU (Non GB)
Transaction Input Factor   Product Type Equal To Goods
GB GOODS PURCHASE REVERSE CHARGE
Determining Factor ClassClass QualifierDetermining Factor NameOperatorValue
User Defined Geography Ship From Economic Regions Equal To European Economic Community
Geography Ship From Country Not Equal To United Kingdom
Geography Ship To Country Equal To United Kingdom
Transaction Input Factor   Product Type Equal To GOODS
Transaction Generic Classification   Transaction Business Category Equal To Purchase Transaction
Registration Bill From Party Registration Status Equal To Registered in EU (Non GB)

GB INTRA EU AND DOMESTIC SERVICES

This example uses the tax condition set GB INTRA EU AND DOMESTIC SERVICES to process service transactions where the services are not explicitly defined, and thus the place of supply is deemed to be Where the Supplier Belongs.

The tax condition set GB INTRA EU AND DOMESTIC SERVICES uses the tax determining factor set GB VAT PLACE OF SUPPLY in the Determine Place of Supply rule.

GB INTRA EU AND DOMESTIC SERVICES
Determining Factor ClassClass QualifierDetermining Factor NameOperatorValue
User Defined Geography Bill From Economic Regions Equal To European Economic Community
Transaction Input Factor   Product Type Equal To Services

GB DOMESTIC GOODS BILL FROM NON REG

This example uses the tax condition set GB DOMESTIC GOODS BILL FROM NON REG to determine that a supplier has to be registered for UK VAT in order to charge UK VAT on goods. If the supplier is not registered, then VAT is not applicable.

The tax condition set GB DOMESTIC GOODS BILL FROM NON REG uses the tax determining factor set GB VAT APPLICABILITY in the Determine Tax Applicability rule.

GB DOMESTIC GOODS BILL FROM NON REG
Determining Factor ClassClass QualifierDetermining Factor NameOperatorValue
Transaction Input Factor   Product Type Equal To GOODS
Geography Ship From Country Equal To United Kingdom
Geography Ship To Country Equal To United Kingdom
Registration Bill From Party Registration Status Not Equal To Registered

GB DOMESTIC SERVICES BILL FROM NON REG

This example uses the tax condition set GB DOMESTIC SERVICES BILL FROM NON REG to determine that a supplier has to be registered for UK VAT in order to charge UK VAT on services. If the supplier is not registered, then VAT is not applicable.

The tax condition set GB DOMESTIC SERVICES BILL FROM NON REG uses the tax determining factor set GB VAT APPLICABILITY in the Determine Tax Applicability rule.

GB DOMESTIC SERVICES BILL FROM NON REG
Determining Factor ClassClass QualifierDetermining Factor NameOperatorValue
Transaction Input Factor   Product Type Equal To SERVICES
Geography Bill From Country Equal To United Kingdom
Geography Bill To Country Equal To United Kingdom
Registration Bill From Party Registration Status Not Equal To Registered

GB INTRA EU GOODS SALE ZERO RATE

This example uses the tax condition set GB INTRA EU GOODS SALE ZERO RATE to determine when a zero rate is applicable for the Determine Tax Status rule.

The tax condition set GB INTRA EU GOODS SALE ZERO RATE uses the tax determining factor set GB VAT STATUS in the Determine Tax Status rule.

GB INTRA EU GOODS SALE ZERO RATE
Determining Factor ClassClass QualifierDetermining Factor NameOperatorValue
Geography Ship From Country Equal To United Kingdom
User Defined Geography Ship To Economic Regions Equal To European Economic Community
Geography Ship To Country Not Equal To United Kingdom
Transaction Input Factor   Product Type Equal To GOODS
Registration Bill From Party Registration Status Equal To Registered
Registration Bill To Party Registration Status Equal To Registered in EU (Non GB)
Transaction Generic Classification   Transaction Business Category Equal To Sales Transaction

GB GOODS REDUCED RATE

This example uses the tax condition set GB GOODS REDUCED RATE to use a reduced rate for sales of reduced rate goods.

The tax condition set GB GOODS REDUCED RATE uses the tax determining factor set GB VAT STATUS in the Determine Tax Status rule.

GB GOODS REDUCED RATE
Determining Factor ClassClass QualifierDetermining Factor NameOperatorValue
Product - Inventory Linked   GB VAT Product Level 2 Equal To Reduced Rate Goods

GB SERVICES REDUCED RATE

This example uses the tax condition set GB SERVICES REDUCED RATE to use a reduced rate for sales of reduced rate goods.

The tax condition set GB SERVICES REDUCED RATE uses the tax determining factor set GB VAT STATUS in the Determine Tax Status rule.

GB SERVICES REDUCED RATE
Determining Factor ClassClass QualifierDetermining Factor NameOperatorValue
Product - Inventory Linked   GB VAT Product Level 2 Equal To Reduced Rate Services

GB GOODS ZERO RATE

This example uses the tax condition set GB GOODS ZERO RATE to use a zero rate for sales of zero-rated goods.

The tax condition set GB GOODS ZERO RATE uses the tax determining factor set GB VAT STATUS in the Determine Tax Status rule.

GB GOODS ZERO RATE
Determining Factor ClassClass QualifierDetermining Factor NameOperatorValue
Product - Inventory Linked   GB VAT Product Level 2 Equal To Zero Rated Goods

GB SERVICES ZERO RATE

This example uses the tax condition set GB SERVICES ZERO RATE to use a zero rate for sales of zero-rated services.

The tax condition set GB SERVICES ZERO RATE uses the tax determining factor set GB VAT STATUS in the Determine Tax Status rule.

GB SERVICES ZERO RATE
Determining Factor ClassClass QualifierDetermining Factor NameOperatorValue
Product - Inventory Linked   GB VAT Product Level 2 Equal To Zero Rated Services

GB EXPORT GOODS OUTSIDE EU

This example uses the tax condition set GB EXPORT GOODS OUTSIDE EU for transactions involving the export of goods to non-EU countries.

The tax condition set GB EXPORT GOODS OUTSIDE EU uses the tax determining factor set GB VAT STATUS in the Determine Tax Status rule.

GB EXPORT GOODS OUTSIDE EU
Determining Factor ClassClass QualifierDetermining Factor NameOperatorValue
User Defined Geography Ship To Economic Regions Not Equal To European Economic Community
Geography Ship From Country Equal To United Kingdom
Transaction Input Factor   Product Type Equal To GOODS

GB GOODS EXEMPT RATE

This example uses the tax condition set GB GOODS EXEMPT RATE for the sale of goods with a zero-rated exempt status.

The tax condition set GB GOODS EXEMPT RATE uses the tax determining factor set GB VAT STATUS in the Determine Tax Status rule.

GB GOODS EXEMPT RATE
Determining Factor ClassClass QualifierDetermining Factor NameOperatorValue
Product - Inventory Linked   GB VAT Product Level 2 Equal To Exempt Goods

GB SERVICES EXEMPT RATE

This example uses the tax condition set GB SERVICES EXEMPT RATE for the sale of services with a zero-rated exempt status.

The tax condition set GB SERVICES EXEMPT RATE uses the tax determining factor set GB VAT STATUS in the Determine Tax Status rule.

GB SERVICES EXEMPT RATE
Determining Factor ClassClass QualifierDetermining Factor NameOperatorValue
Product - Inventory Linked   GB VAT Product Level 2 Equal To Exempt Services

GB PURCHASE LINKED TO EXEMPT SALE ZERO REC

This example uses the tax condition set GB PURCHASE LINKED TO EXEMPT SALE ZERO REC for purchases linked to exempt sales with zero recovery.

The tax condition set GB PURCHASE LINKED TO EXEMPT SALE ZERO REC uses the tax determining factor set GB VAT RECOVERY RATE in the Determine Recovery Rate rule.

GB PURCHASE LINKED TO EXEMPT SALE ZERO REC
Determining Factor ClassClass QualifierDetermining Factor NameOperatorValue
Transaction Input Factor   Intended Use Equal To GB Linked to Exempt Sale

GB PRODUCT ZERO RECOVERY

This example uses the tax condition set GB PRODUCT ZERO RECOVERY for transactions on certain goods and services that have zero recovery.

The tax condition set GB PRODUCT ZERO RECOVERY uses the tax determining factor set GB VAT RECOVERY RATE in the Determine Recovery Rate rule.

GB PRODUCT ZERO RECOVERY
Determining Factor ClassClass QualifierDetermining Factor NameOperatorValue
Product - Inventory Linked   GB VAT Recovery Equal To Zero Recovery

Tax Rules

These examples show the tax rules created for the tax GB VAT. The tax rules make use of the tax determining factor sets and tax condition sets created for GB VAT. Refer to these sets to understand their usage in each tax rule.

For each tax condition used in a tax rule, the rule result applies when its corresponding tax condition is evaluated as true.

Determine Place of Supply

This tax rule determines the place of supply on Intra-EU transactions for goods and services.

Determine Place of Supply
Tax Rule CodeEffective FromCondition SetOrderRule Result
GB VAT PLACE OF SUPPLY 1-Jan-2003 GB INTRA EU GOODS PURCHASE 90 Ship to, use bill to if ship to is not found
    GB INTRA EU AND DOMESTIC SERVICES 105 Bill From

Determine Tax Applicability

This tax rule determines whether a supplier is registered for UK VAT in order to charge VAT on goods and services.

Determine Tax Applicability
Tax Rule CodeEffective FromCondition SetOrderRule Result
GB VAT APPLICABILITY 1-Jan-2003 GB DOMESTIC GOODS BILL FROM NON REG 50 Not Applicable
    GB DOMESTIC SERVICES BILL FROM NON REG 60 Not Applicable

Determine Tax Registration

This tax rule determines the tax registration when a UK VAT registered customer purchases goods from a non-UK VAT registered supplier, where the goods are sent from an EU country outside the UK to the UK.

Determine Tax Registration
Tax Rule CodeEffective FromCondition SetOrderRule Result
GB VAT REGISTRATION 1-Jan-2003 GB GOODS PURCHASE REVERSE CHARGE 50 Bill To Party

Determine Tax Status

This tax rule determines the tax status of the transaction. Each rule result indicates the tax status to use on the transaction if the corresponding condition is evaluated as true.

Determine Tax Status
Tax Rule CodeEffective FromCondition SetOrderRule Result
GB VAT STATUS 1-Jan-2003 GB INTRA EU GOODS SALE ZERO RATE 50 GB VAT INTRA EU ZERO
    GB EXPORT GOODS OUTSIDE EU 60 GB VAT ZERO
    GB GOODS ZERO RATE 70 GB VAT ZERO
    GB SERVICES ZERO RATE 80 GB VAT ZERO
    GB GOODS EXEMPT RATE 90 GB VAT EXEMPT
    GB SERVICES EXEMPT RATE 100 GB VAT EXEMPT
    GB GOODS REDUCED RATE 110 GB VAT REDUCED
    GB SERVICES REDUCED RATE 120 GB VAT REDUCED

Determine Recovery Rate

This tax rule derives a zero recovery rate for purchases linked to exempt sales with zero recovery.

Determine Recovery Rate
Tax Rule CodeEffective FromCondition SetOrderRule Result
GB VAT RECOVERY RATE 1-Jan-2003 GB PURCHASE LINKED TO EXEMPT SALE ZERO REC 5 GB VAT ZERO REC RATE

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