VAT/ICP declaration

If you are liable to VAT, you must periodically submit a turnover tax declaration to the tax authority. You can generate the VAT declaration automatically using Profit. If you do business with foreign companies or organisations within the EU, then you must also submit an ICP declaration.

Description

The 'Value Added Tax' (VAT) is a tax on the difference between sales and purchases. The difference between sales and purchases (including costs) is also called 'added value'. Another name is 'Turnover tax’ although this name does not fully cover the meaning.

The VAT is determined as follows:

You calculate VAT on the goods and/or services you deliver to your sales contacts.
Your purchase contacts charge you VAT if you purchase goods and/or services.

VAT is a declaration tax. You must pay the VAT you receive from the customer over to the tax authority. The VAT you pay to your suppliers can be deducted from this.

You make the VAT declaration in Profit for domestic transactions and for import and export. If you are dealing with exports within the European Union, you also need to submit a ICP declaration. You use the VAT codes for both declarations.

You enter the VAT automatically by using VAT codes in the sales orders, invoices and financial entry layouts. In this way, Profit applies the correct VAT rate and the VAT amounts are entered in the correct ledger accounts. The amounts for the VAT declaration are based on these.

Depending on the settings, Profit generates the ICP declaration automatically at the same time as the VAT declaration. You can deviate from this. If you have not posted any entries to a VAT code for intra-community supplies, the automatically generated declaration will be empty.

In certain specific cases, you must also maintain an ICP register if you transport goods to other EU countries without an invoice. This occurs if you have international branches to which you deliver goods/services. You must also indicate other invoice-free activities on an ICP declaration. Some examples here would be moving a hoisting crane across a border, or having work performed in a foreign country for which goods are transported across the border and then back again.

Please refer to the tax authority's website for further information on VAT and ICP.

Preparation

Configure VAT/ICP
VAT codes and sections are supplied by default with Profit. In this part you can find all details about the configuration.