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Set up VAT exemption

Not every company needs to submit a VAT declaration. If you are an institution or association, then you are not subject to VAT duty. You can set this via the VAT exemption. After this, you will not need to configure anything else.

In the settings at environment level, you indicate (by means of an activation) that VAT exemption applies. This function suppresses the VAT functionality in Profit Financial.

In the order management component of Profit (Article, Invoicing), the VAT functionality cannot be suppressed. It is however possible to indicate at the level of the VAT duty that no VAT needs to be calculated or invoiced. In this case, this turnover will not be included in the VAT declaration.

There are a number of situations in which a transaction is exempt from the VAT duty:

  • Exemption based on the nature of the goods or services. For instance: medical services and immovable goods.

    For this purpose you specify for this item that no VAT will be calculated (Zero rate). For the item, you can also record this per country on the VAT rate groups tab.

  • Exemption for delivery of goods for which the VAT was not deductible on purchase of the goods, such as when a medical institution sells a used device.

    For the debtor and creditor, indicate under the VAT duty that the transactions with this contact are exempt. In this case, invoicing will not use the rate based on the item, but rather 0%. This is the Exempt VAT duty.

Please see the tax authority's website for further information.

To activate VAT exemption:

Ideally you should activate the new functionality at the end of the working day, or over the weekend. This is because during the activation process, a conversion will always occur, and during this conversion your employees cannot work in Profit. It is recommended that you first test a new activation in a test environment, before you implement it in the live environment.

To activate the functionality:

  1. Go to: General / Environment / Management / Properties.
  2. Go to the tab: Activation.
  3. Select the check box of the functionality that you want to activate.

    Profit warns you that after activating the functionality the environment needs to be converted.

  4. Click on: Yes to activate the function.
  5. Click on: OK.

    Profit warns you that no other users can be logged on.

  6. Click on Yes in the message.

Directly to

  1. Configure VAT/ICP
  2. VAT exemption
  3. Configure VAT and ICP declarations
  4. Add (or check) VAT accounts
  5. VAT rate groups and rates
  6. Add (or check) VAT codes
  7. Format (or check) VAT sections
  8. Set the VAT duty for a debtor/creditor
  9. VAT settings per item
  10. Configure VAT-transferred
  11. Configure automatic payment to the tax authority
  12. Configure a fiscal unit VAT declaration
  13. Configure the approval of the VAT declaration via OutSite
  14. Configure VAT declaration Luxembourg
  15. Configure turnover tax for the Netherlands Antilles
  16. Configure Aruba turnover tax (BBO and BAZV)
  17. Configure items for foreign VAT

Process

VAT/ICP declaration