Important fields in the VAT code table

The following fields in the VAT code table are most important.

SAF-T tax code

These codes are the link between the Business NXT VAT codes and the Danish VAT SAF-T codes, named SAF-T tax code in the Business NXT tables. The electronic VAT report is built upon the standard Danish VAT SAF-T codes.

If a Business NXT VAT code for some reason is wrongly connected to a SAF-T tax code, the VAT report will be incorrect if it’s used for a transaction in the actual VAT period. So, if an incorrect value is discovered for a Business NXT VAT code, after the transaction has been updated, but before the VAT report is run and approved, adjust the connected SAF-T tax code to the correct one and run the VAT report again.

The value for the SAF-T tax code isn't stamped on the general ledger transactions when updated, only the Business NXT VAT code is stamped on the transaction. This makes it possible to adjust and get it correct as mentioned above: before the VAT report is run and approved.

VAT no. (VAT rate number)

This value points directly to a specific row number in the VAT rate table, where relevant information such as the VAT rate to be used, which general ledger account for incoming and outgoing VAT to be used or voucher lines are stored. This link must always be correct.

Turnover class

The logic in the VAT report is based on a combination of Turnover class and the standard Danish VAT codes (SAF-T codes) that are linked to each of the Business NXT VAT codes. The value controls the input data to the voucher line table when calculating the VAT amount and the VAT basic amounts, but also when generating the periodic VAT report.

The Turnover class is fetched automatically from the Business NXT VAT code that is added to the transaction and “stamped” on the updated general ledger transactions during the update process of the voucher lines.
Note:
The Turnover class can also be set directly on the general ledger accounts, but this is not recommended! If the Turnover class is set both on a VAT code and on the general ledger account, the Turnover class from the general ledger account will override the Turnover class from the VAT code. This might cause confusion and misunderstandings, which is why Turnover class should only be set at the VAT codes when establishing new ones - never at the general ledger accounts!
In the standard setup of VAT codes in Denmark, the following turnover classes are in use: 1, 2 , 3, 4 , 5, 6, 7, 8, 9, 12, 16, 21, 22, 25 and 28.

VAT code processing

Most of the VAT codes don't have a value in this field, but the following ones are set to 2 - Do not calculate VAT amount:
VAT code Description SAF-T code
106 Momspligtige salg (DK), 25% moms - nettoføring S1
203 Indgående moms (DK), fuld fradrag (100%) - netto K1
601 Olie-og flaskegasafgift - netto Olie-flaske
603 El-afgift - nettoføring El-afgift
605 Naturgas- og bygasafgift - nettoføring Naturgas
607 Kulafgift - nettoføring Kulafgift
609 CO2-afgift - nettoføring CO2-afgift
611 Vandafgift - nettoføring Vandafgift

Cost %

Below we explain the use of this field, which VAT codes that have a fixed deduction value and which of them have to be set manually for each Danish company, if relevant. These VAT codes are only to be used for companies where partly deduction of incoming VAT is relevant. Business NXT uses “Cost %” and not “Deduction %”. This means that if you for example are allowed to deduct 60 % of the incoming VAT for a certain purchase, the Cost % is 40.

Partly deduction of incoming VAT

Some companies aren't approved for full deduction of all their incoming VAT. In Business NXT this is handled by adding a percentage value in the Cost % field on the relevant VAT codes. If the company has more than one percentage rate for certain purchases depending on for example location, cost type or cost units, they need to create their own parallel VAT code for each percentage where all other parameters and settings must be equal to the parent VAT code.

Some of the Business NXT VAT codes have a mandatory fixed deduction percentage set by the tax authorities. These VAT codes must be used as they are, without any change in the Cost % field when relevant.

Other standard VAT codes are meant for variable deduction percentages depending on the company, purchase itself and where it is belonging. The Cost % on these VAT codes always have to be set when relevant.

All the Business NXT VAT codes meant for company-based deduction percentages, have the pre-set text Indtast omkostnings % (insert the cost percentage) in the Momsopplysninger (VAT information) column, which means that these VAT codes have no standard value set in the Cost % field.

Business NXT uses “Cost percentage” and not “Deduction percentage”

This means that if you have you can deduct 60 % of the incoming VAT amount on a certain purchase, the cost percentage is 40. This means that 40 % of the total VAT amount is not deductible and is therefore a cost and will be automatically booked to the used cost account on a separate general ledger transaction within the same voucher.

If this company is approved for full deduction of VAT on some of their incoming VAT on domestic purchases and only partial right for VAT for such deduction on other domestic purchases, the value “40” then has to be set on VAT code 205 in the Cost % field.

If the company has more than one deduction percentage for incoming VAT on their domestic purchases, they have to create new self-defined Business NXT VAT code with the same setup as the parent standard VAT code 205.