Countries

An essential part of EC VAT accounting is the definition of the countries with which you will be trading. Country specification is required for all EC trading, whether or not you are required to submit Supplementary Declarations (SDs).

Check the HMRC web site for the latest information about EU country codes and VAT numbers.

For VAT registered companies from other EC states, this must be the country in which they are registered for VAT. Customers’ VAT registration numbers must be printed on EC Sales Lists (ESLs) and on sales invoices, and the VAT registration numbers must be prefixed by their official country codes. When you create customer transactions, the application will append customers’ country codes to their VAT registration numbers automatically. Where you are required to submit Supplementary Declarations (SDs), you can define additional countries as countries of origin. Countries of origin are those in which goods are actually produced; not necessarily those countries with which you trade.

You can assign the country code to relevant stock items using the Country of Origin box on the Stock - Processing - EC VAT form. You can also assign the country code to each EC customer and supplier in that country using the Country box on the Sales - Processing - EC VAT form and the Purchase - Processing - EC VAT form.

Suppliers from Outside the European Union

Some services like electronically supplied services supplied by non-EC businesses to EC consumers are subject to VAT in the Member State where the customer belongs. For example, a Canadian company supplying services to a UK company would need to register for VAT in the UK.

Identification numbers for the special scheme have their own unique format beginning with the prefix 'EU', followed by a nine-digit number. These are different from VAT registration numbers issued under the normal rules.

This means that non-EC businesses would be required, under the normal rules, to register separately and account for VAT in each and every Member State in which they make those supplies. For example, a Canadian business with customers in the UK, France and Spain would have to register in, and submit declarations to each of those Member States.

As an alternative, the special scheme offers eligible non-EC businesses the option of registering electronically in a single Member State of their choice and accounting for VAT on their sales of electronically supplied services to all EC consumers on a single quarterly electronic VAT declaration which provides details of VAT due in each Member State. This is submitted with payment to the tax administration in the Member State of registration which then distributes the VAT to the Member States where the services are consumed.

For more information about the place of supply of services including non-EC suppliers, please see the HMRC web site.

Box

Description

Country Code

The official two-character identifier for the country. You must use the official code to identify countries in the EC VAT module.

Alternative Code

Some EC Member States are identified by an alternative two character code for SD purposes only. For those countries which do not have an alternative code, you should enter the main code again.

Numeric Code

A numeric code that identifies the country. For some EC Member States such as Eire, an official numeric code is required for SD purposes only. For use in Eire, the Irish authorities have also supplied an individual numeric code for Northern Ireland of 016. The EC VAT module supports this additional code but you are not required to define Northern Ireland as a separate country. When you create customer and supplier records with a country code of GB, if your home country is Eire, the application will ask if the customer or supplier is sited in mainland UK or in Northern Ireland. The relevant numeric country code will be printed on the SD accordingly.

Default SL Currency

The default currency for sales transactions that apply to customers from the country. You can select from a list. Currencies are maintained using the Exchange Rates command in the System Manager. The application displays this as the default in the Currency box on the Options form displayed when you use the Options command on the Action menu associated with the Customer form in the Sales module.

Default PL Currency

The default currency for purchase transactions that apply to suppliers from the country. You can select from a list. Currencies are maintained using the Exchange Rates command in the System Manager. The application displays this as the default in the Currency box displayed when you use the Options command on the Action menu associated with the Supplier form in the Purchase module.

Tax Description

An abbreviated description for VAT applicable to the country. Most EC Member States have an abbreviated tax description for printing on invoices and other tax related documents. For the United Kingdom this is VAT.

Home Country

An option that determines whether the country is your home country.

EC Member State

An option that determines whether the country is an EC Member State.

VAT Registered There

An option that determines whether your organization is registered for VAT in the country. Where you have selected the Home Country option, this option is automatically selected. This option is provided where you sell to customers in other EC Member States who are not themselves VAT registered. Where the total value of such sales to an individual state in a calendar year exceeds that state’s distance selling threshold, you will be required to register for VAT in the state, in addition to your home country registration. VAT accounting requirements differ for distance sales according to whether or not you are VAT registered in the destination state. Therefore, you must select this option if you registered for VAT in the state.

VAT After Discount (Settlement)

An option that determines that VAT is calculated after settlement discount has been deducted from invoices.

Important: You must clear this option on the home country record if your home country is the United Kingdom. From that date when processing an invoice for UK based customers and suppliers, VAT must be calculated before any settlement discount is calculated.