This article describes the handling of purchase VAT in Midoco Midoffice created in GLOBAL-686 - Purchase Prices incl./without VAT Geschlossen

Please note:

Purchase VAT is recognised in Midoco Midoffice once the purchase invoice (which includes purchase VAT/input VAT) is entered/uploaded into the application.

Entering a purchase invoice in Midoco can happen in 3 ways:

• Option 1: entering the (individual/physical or PDF) invoice in the Supplier Invoice tab in the related item of an order
• Option 2: Manual Supplier Settlement
• Option 3: Electronic Supplier Settlement

Prerequisites to use this functionality

• A setup called 'Tax Breakdown' has to be done (once) in Order Master Data.
  • In order to do that, the Org Unit as well as the role (usually Admins) that is doing the setup, need the Module 'Order/OrderSD_vat_account_schemas"

• The Org Unit needs to have the module Order/SIMPLIFIED_VAT_DIVISION assigned. The user role that is destined to enter purchase invoices in Midoco needs to have that Module assigned as well.

Please talk to our Helpdesk Team

Setup of Tax Breakdown

Order Master Data → Tax Breakdown (only visible when both the Org Unit and the role you are working in have got the module named above assigned)

Please create a Schema (in the tab shown) with a name that is talking to you.

In case you are using the same expense/cost of sales accounts for both B2B and B2C transactions/sales, please tick both checkboxes for your default schema. (would you be working with different cost of sales/expense account ID´s for B2B and B2C, separate Tax Breakdown schema are required, so in that case please tick the relevant checkbox, that applies to that schema).

Once this setup is done, please double-click the created VAT schema to enable the Tab 'Accounts Assignment' → here you will enter the corresponding cost of sales/expense account ID´s for your input/purchase VAT rates.

This is done to tell the system when handling purchase VAT, which accounts to use for the NET amount of the transaction. In most user cases we have seen so far, it would be the same account ID for all kinds of transactions, so no matter if B2C/B2B - if full/reduced/zero VAT rate is used, the NET amount is usually put to the same account ID.

So the example explained in this article is based on that scenario as well:

That´s it for the setup. You are good to go.

Purchase invoice handling

Option 1: entering the invoice manually in the related item of an order

When entering a purchase invoice in the order directly, you will now have another field (see screen below) which enables you to select the input VAT percentage, that is included in the item.

Lets say the purchase invoice for this hotel item arrived. You bought the hotel item for 100.00 GBP (gross, so incl. VAT). You added a markup of 20.00 GBP to sell it.

You expect the purchase invoice to be for 100.00 GBP.

The purchase invoices states 100.00 GBP purchase price and that amount includes 20% VAT already. So the net (meaning free of VAT, not as in supplier commission deducted) amount is 83.33 GBP, the included VAT amount is 16,67 GBP.

In case your purchase price needs to be split into different portions which include different VAT rates, please enter each portion for each VAT rate separately.

The resulting journal lines (in our unit example there are separate journal lines for the net amount and the VAT amount) would look like this:

Example:

Out of the 100.00 GBP gross amount you have:

• 50.00 GBP gross which include 20% VAT
• 20.00 GBP gross which include 5% VAT
• the remaining 30.00 GBP are VAT-able but come at a 0% VAT rate

→ this example would require you to do the described steps above 3x, once for each gross price to be entered in the Supplier Invoice field and its corresponding VAT rate selected next to it.

Option 2: Manual Supplier Settlement

Menu bar → Reconciliation → Supplier Settlement → Manual Supplier Settlement

Literally the same goes for the Manual Supplier Settlement. You are provided with an option to select the VAT rate as you input/amend the searched items purchase invoice values.

Having split VAT rates on the purchase invoice for one item would require you to apply the same logic as described above: enter one set of data each for each purchase price gross (VAT inclusive) amount and choose its corresponding VAT rate.

Option 3: Electronic Supplier Settlement

To use this option to handle the purchase VAT, you need to be provided with electronic invoice data by your supplier which include the VAT ratio or VAT amount.

The general functionality of the Electronic Supplier Settlement is explained in the parent article Supplier Settlement.

In this article here we would like to focus on the purchase VAT.

Midoco equipped the following import formats with the functionality to reconcile purchase VAT values (in the other use cases we have not found purchase values incl. VAT, so they are left untouched for the time being - in case you find use cases for other import formats than the ones named here, please get in touch with your Key Account/Project Manager at Midoco):

• the generic 'MIDOCO' import format
• AIRPLUS_CSV

AIRPLUS_CSV is a bespoke format which means, that you do not have to take care of finding the purchase VAT ratio/amount in the file on import, our system does that for you.

When working with the generic MIDOCO import format for supplier settlement files, the process would need to be:

• select source system = MIDOCO
• browse and upload the relevant settlement file
• determine the delimiter, data format and decimal delimiter according to the way it is present in the file
• select the corresponding supplier
• when assigning the Midoco field labels to the columns in the file you need to identify the Net Amount (this would resemble the amount incl. VAT), Purchase VAT % is needed.

When the file is imported in the system, do the usual 'Check' of the purchase invoice file.

In the 'Bookings' tab / the transaction view of the settlement file on double clicking on a transaction, you will find the purchase VAT values displayed for a transaction.