Tax codes: per item, per line and per document
You will be able to: Name Zeyto's five tax codes and the VAT 201 boxes they report in; Explain where a document line gets its tax code and how to override it; Say what a customer or supplier does and does not change.
- Read not done yet
- Self-check: not taken not done yet
- Lesson complete not done yet
A tax code tells Zeyto how a line is taxed and which box of the VAT return it belongs in. Zeyto comes with five codes. The Rate and the boxes are stored on the code in Settings, Tax, never typed on documents.
| Code | Treatment | Rate | Box on a sale | Box on a purchase |
|---|---|---|---|---|
| SR5 | Standard | 5% | 1 | 9 |
| ZR | Zero | 0% | 4 | none |
| EX | Exempt | 0% | 5 | none |
| RCM | Reverse charge | 5% | 3 | 10 |
| OOS | Out of scope | 0% | none | none |
Where a line's code comes from
- The item. Every item has a VAT Code in the Tax (VAT) card of its record. New document lines for that item start on it.
- The item group. If a group has a Default VAT Code, items created in it without their own code start on that, for example through the Import Center. The New Item screen and the Items import start on SR5 themselves, so check the code there.
- The line. On a sales or purchase document, tick Tax Code under Columns to show the Tax column and change the code of one line.
- Charges. Delivery, freight and similar charges take their code from the charge type in Expense Types, and you can change it on the document.
Overriding a line: an export
Changing codes without rewriting history
- A change in Settings, Tax affects only documents you post afterwards; posted documents keep the VAT they were posted with.
- Changing the VAT Code on an item affects documents from now on. Saved documents keep their line codes.
- To change many items at once use Set VAT Code on the Items list. Pick the code and the scope, press How many? to see how many items will change, then commit.
- An inactive code is no longer offered on items and lines, but old documents that use it are not changed.
Reverse charge switches a code for you
Reverse charge is the one case where Zeyto changes a line's code by rule. An item can belong to an RCM category (Settings, RCM Categories). When you add it to a sale, Zeyto checks the category, the customer's 15-digit TRN and, where the category requires one, a valid declaration from the customer. If all pass, the line switches to the category's reverse-charge code and shows an RCM tag; the invoice then charges no VAT on that line.
Lines with no tax code
A line with no VAT code is in no box. The Return Worksheet shows a red banner naming such lines (for example SI-00012 line 3) and will not let you mark the period filed until each one has a code. Fix it by amending the document and giving the line a code.
Rules change; always check the FTA website.
Try it in the demo
- Open Inventory, Items, open any item and look at the Tax (VAT) card. Which code does it carry?
- Open Sales, Sales Invoice, press + New Sales Invoice, add an item, then press Columns and tick Tax Code and VAT Amt.
- Change that line's Tax to ZR and watch the VAT Amt and the totals preview change. Do not press Submit in the shared demo.
- Open Settings, Tax and compare the Sale Box and Purchase Box of SR5, ZR and RCM.
Public demo company, sign in as admin / demoAdmin123. Data refreshes nightly.
- Five codes cover the UAE treatments: SR5, ZR, EX, RCM and OOS, each mapped to VAT 201 boxes.
- A line starts on its item's code; you change the line, not the customer, to zero-rate an export.
- Reverse charge is the exception: Zeyto switches the line when category, TRN and declaration checks pass.
- Lines without a tax code appear in no box and block the filing lock.
Check yourself
3 questions on this lesson. Not timed, not the exam, and you can try again. Score 60% or more, and read the lesson, to complete it.