Notional VAT For Ireland And Other EU

 

Overview

For invoices / payments to EU (and non-local) suppliers, if the VAT code is one of the EU Purchase ones, we take it that the reverse charging applies.

In that case, Net goes to boxes E2/ES2 (as it currently does). Take a 'Notional' VAT amount at standard ('A', currently 23%) rate, which goes to boxes T1 & T2 (effectively cancelling out for the total VAT payable).  The breakdown of T1 & T2 should also show these transactions, with the 'A' rate.

An Irish Invoice Basis business is created with one customer based in Hungary and one supplier based in Netherland. Default 23% Vat is applied on both. 

 Following are the transactions generated
 
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 The VAT return is generated for Jan 2013. It reflects the following entry
 
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