Last updated on SEPTEMBER 16, 2016
Applies to:PeopleSoft Enterprise SCM Billing - Version 9.1 to 9.2 [Release 9]
Information in this document applies to any platform.
On : 9.1 version, VAT Calculation
As from 1 January 2015, intra-EU B2C telecommunications, broadcasting and electronic services are to be taxed in the Member State in which the customer is established or has his permanent address or usual residence, regardless of where the taxable person supplying those services is established.
These are the new EU VAT rules for intra-EU B2C telecommunications, broadcasting and electronic services:
- Sales to VAT registered businesses: no change.
- Sales to non-VAT registered EU customers/consumers: VAT must be charged at the VAT rate in the country where the service is consumed and VAT must be reported to that country.
At this moment PeopleSoft does not automatically set the reporting country correctly for sales to non-VAT registered EU customers/consumers.
Because of this both the Treatment and VAT Code are incorrect.
To work around this user will have to change the reporting country manually and click on 'Adjust Affected VAT Defaults' to see the VAT correct for these new rules.
As from 1 January 2015, the system should automatically set the correct reporting country, Treatment and VAT Code for sales to non-VAT registered EU customers/consumers
The issue can be reproduced at will with the following steps:
- For this test I will use customer FRACM001. This is a non VAT registered customer located in France with no VAT Registration ID.
- Open VAT Entity NLD01V. Add a new registration for France. Name: France, VAT Registration ID FR 0000000190 and location FRA01. Add a VAT return VAT address (Location: SHARE/FRA01)
- Add a new charge code called VAT2015 in Set Up Financials/Supply Chain > Product Related > Billing > Setup > Charge Code.
- Enter a new bill for business unit NLD01, bill type SVC and customer FRACM001.
- On the Line – Info 1 tab select ID as the identifier table and select our new VAT2015 charge code.
- Enter the unit of measure as EA.
- Click on VAT Info.
- Click on Get VAT Defaults.
- Click on Expand all Sections.
- Location Country: NLD (defaulted from business unit location)
- Customer location country: FRA
- Service Performed : FRA
- Ship From: NLD
- Ship to: FRA
- Place of Supply Driver: Where physically performed
- Reporting Country: NLD
- Place of Supply Country FRA
- Treatment: Zero Rated EU Service Sale
- VAT Code: NL3
- Please note both the Treatment and VAT Code are incorrect for VAT 2015 rules for electronic services. Treatment should be Domestic Service Sale and VAT Code should be FR1.
- As a work around change the reporting country from NLD to FRA and click Adjust Affected VAT Defaults to see the VAT correct for these new rules (Treatment should be Domestic Service Sale and VAT Code FR1).
The issue has the following business impact:
Due to this issue, there is a risk of applying incorrect VAT because users will have to manually change the reporting country and click Adjust Affected VAT Defaults to see the VAT correct for these new rules.
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