Set the VAT for a VAT-exempt debtor

If you are not exempt from VAT and you send invoices to VAT-exempt debtors, you can set this turnover to not appear on the VAT declaration.

There are two ways to ensure that the turnover from exempted debtors does not end up in your VAT declaration:

• Via the unblocked VAT duty No VAT (intercompany)
• Via a VAT section ‘999’

Via VAT duty 'No VAT (intercompany)':

1. Go to: Financial / VAT/ICP / Configuration / VAT duty.
2. Unblock the VAT duty No VAT (intercompany).

   This VAT duty is blocked by default; you must unblock it first.

3. For the debtor, select VAT duty No VAT (intercompany).
4. Add a new VAT code with Code Purchase/Sales Sales, VAT duty No VAT (intercompany). You do not have to link this VAT code to a VAT section.
5. Create the invoices with a VAT percentage of 0 percent and journalise them.

Via VAT section '999':

1. Go to: Financial / VAT/ICP / Configuration / VAT code.
2. Add a new VAT code with Sales for Code Purchase/Sales.
3. In VAT duty , select Exempt.
4. Select '0' for VAT rate group.
5. For VAT code, enter a high number: in any case a number higher than the pre-existing VAT code with 0% for sales.
6. Go to: Financial / VAT/ICP / Configuration / VAT section.
7. Check whether you have VAT section '999'. Add this section if it is missing. This section is not included in the declaration.
8. Link the new VAT code to VAT section '999'.
9. For the debtor, select VAT duty Exempt.
10. Create the invoices with a VAT percentage of 0 percent and journalise them.