VAT DENMARK SPECIFIC
VAT codes are set up under General Ledger/Maintenance/VAT.
Read more about Danish VAT code set up here. (English translation coming soon.)
(Click on screenshots to enlarge).
Uniconta can handle standard incoming and outgoing VAT as well as reversed VAT charges in response to the EU reverse charge obligation rules described below.
“Reverse payment obligations on domestic trade for certain types of IT equipment for B2B sales only:
These new rules do not apply to sales to private individuals.
The rules cover the following products:
All types of mobile phone including smartphones
Tablets
Laptops
Game Consoles
Chips and microprocessors
Reversed payment obligations apply when the seller sends an invoice without VAT. The buyer in this case needs to calculate the acquisition tax but also deducts the corresponding amount as incoming VAT, that is, if the buyer usually deducts VAT according to standard VAT rules. Only partial VAT deductions are made where employee phones or computers are concerned, since that may also be used privately. The accounting for the transactions depends on whether the company is on the buy or sell side:
On the buy side, we recommend that an additional account be created on the balance sheet under VAT liabilities with a description, such as, “Acquisition VAT on the purchase of IT equipment with reverse payment obligations.”
This will facilitate the accounting for the company’s VAT declaration. When such equipment is purchased, VAT should be credited in this account at a rate of 25% of the purchase price in Denmark. A debit should be posted to the incoming VAT account.
Entries to the two VAT accounts can be made using separate VAT codes. This can be done in the same way for an EU VAT Purchase Code.
The Acquisition VAT account is created as a balance sheet account. When the VAT is then reported to the authorities, the balance on the account is included as outgoing VAT, so the total outgoing VAT is the sum of the standard outgoing VAT and the acquisition VAT.
We recommend that if the company is on the sell side, an additional sales account should be created in the accounts. This could, for example, be called “Reverse Payment Obligations.” Sales of goods that are covered by the new rules, render a credit to this account and this is then reported to the authorities under VAT section C in Denmark. “
The above is managed using the VAT functions in the Uniconta system. This will differ depending on which country the company is based in. (Country location for VAT can be set up under Company/Company Information).
When setting up the VAT accounts in the Chart of Accounts:
If “Incoming VAT” is selected, then the VAT Operation MUST be set to “VAT Operation, Purchase”.
If “Outgoing VAT” is selected, then the VAT Operation MUST be set to “VAT Operation, Sales”.
Overview “VAT operation, purchase”
(Click on screenshots to enlarge).
“VAT operation, Sale”
Danish Uniconta example:
