Tips of the Month - January 2021 This edition of our "Tips of the Month"…
How to apply the Vat rate changes to your system, following on from the Irish Government’s July Jobs Stimulus package.
The Irish Government announced a range of measures in the July Jobs Stimulus package including a six-months reduction in the standard rate of Value-Added Tax (VAT) from 23% to 21% will apply, effective from 1 September 2020.
The easiest way to apply these changes to your system is to update the current vat rates table in the system and use the effective date on the Vat code following the step by step guide below:
- Under Administration, navigate to Tax Codes (See Screenshot 1 below)
- Within the Tax Code screen, highlight the relevant tax code that you wish to update (See Screenshot 2 below)
- With the row selected as above, double click on the row number on the left hand side to open the Tax Definition – Setup screen.
This screen allows you to set up a new effective from date and rate.
We would recommend that you set up the 21% rate and the reversal to 23% against the vat code.
Remember to select ‘Update’ on this screen and the main screen to save your changes. (See Screenshot 3 below)
- You will need to make this change on all vat codes where the current rate is 23%.
On the 1st of September, you may also want to change the description of the VAT name, to reflect 21%, this is to be changed back on 1st March 2021.
The vat rate calculation is effective on the Posting date of the documents in SAP
- The Date that Vat is calculated from is configured under the System Administration / Company Details tab, we suggest that “Document Date” should be used.