Setting up Reverse Charge Tax Codes on Irish Format VAT Returns
To set up a reverse charge VAT code:
- Go to Setup > Codes Maintenance > Tax Codes.
- Add a Tax Code or edit an existing code in the list.
- Tick EU Trade and Reverse Charges.
- Select Goods or Services.
- Click Save. Reverse charges will be calculated at the standard rate for the company.
To check the company standard rate:
- Go to Setup > Codes Maintenance > Tax Codes.
- In the Std column, set the filter to Checked. In the example below this is set to 20%:
See:
How do I use Code Maintenance to Control the Behaviour of the System?
Reviewing Company Details & Settings and Defaults
Understanding EU Reverse Charges on the Irish VAT Return
This VAT Return contains a single Purchase Invoice of £200. It carries a VAT Code tagged as EU Trade and Services with a rate of 0%, while the company has a standard VAT rate of 20%.
The value of the VAT on the Purchase Invoice is 0.00.
VAT on Sales [T1]
The system adds the value of VAT on EU Purchases calculated above, in this case, £40 in VAT on Sales [T1].
VAT on Purchases [T2]
The system calculates the VAT due on EU Purchases of Goods and Services at the standard rate for the company. In this case, 20% of £200 is £40.
This is added to the total in VAT on Vat on Purchases & Other Inputs [T2] of the Irish VAT Return.
Net VAT for payment/reclaim [T3] [T4]
The total VAT Payable or Repayable is calculated and shown in boxes T3 and T4. In this example, where there is only a Reverse Charge Invoice, the net VAT will be zero as the value of sales is the same as purchases for Reverse Charges.
Total Services from other EU countries [ES2]
The gross amount of any Purchase Invoices carrying the Reverse Charge VAT Code Service is entered into Total Services from other EU countries [ES2]. In this case, it is £200.
Total Goods from other EU countries [E2]
The gross amount of any purchase invoices coded to the Reverse Charge VAT Code Goods is entered into Total Goods from other EU countries [ES2]. In this case, it is £200.
