Italy: Changes in VAT management by L.D. 119 of 23 Oct 2018 on Dynamics AX 2012 R3

Applies to: Dynamics 365 for Finance and Operations

Introduction


On 23rd of October 2018 in Italy the LawDecree 119 (L.D.119/2018) introduced a change in value-added tax (VAT) managementin Italy that takes effect on July 1, 2019. Here is a summary of the change:

  • VAT payerscan recover the input VAT in the VAT settlement for the month when the VATpoint is triggered, even if the purchase invoice is received and recorded inthe input VAT ledger before the fifteenth day of the next month. This ruledoesn’t apply to transactions where the VAT point is triggered in a fiscal yearthat differs from the fiscal year in which the purchase invoice is received.
  • Forsupplies of services and supplies of goods, the invoice can be issued by thefifteenth day of the month after the month in which the VAT point wastriggered. Invoices that are issued and booked before the fifteenth day of themonth after the month in which the VAT point was triggered must be included inthe VAT settlement of the previous month.
  • Currently,invoices must be issued no later than the VAT point of the transaction (thatis, the date of the delivery for the domestic sales of goods). In particular,invoices can be issued up until midnight of the day when the VAT point wastriggered. Starting on July 1, 2019, the invoice can be issued within 10 daysof the VAT point. If the invoice isn’t issued at the VAT point, it shouldinclude, in addition to the invoice date, a reference to the VAT point date.

Invoicesthat are booked before the fifteenth day of the next month, but that have areference to the previous VAT settlement, should not interrupt the sequentialposting. Invoices with VAT point date in the previous month but invoice date inthe current month should be booked in a chronological sequence with theinvoices in the current month  with areference to the fact that these invoices are related to the previous VATsettlement.

Companiesthat issue the sales invoice on the same day, without applying the change thatis introduced by L.D.119/2018, will remain compliant.

Overview


This hotfixis delivered to support the changes introduced by the L.D.119/2018 on Microsoft Dynamics AX 2012 R3.

Theregulatory feature introduces a new date-type field for VAT transactions – Dateof VAT register. The additional date will serve as a VAT pointdetermination criterion for including VAT transactions in the scope of thesales tax settlement period and, effectively, in VAT returns reporting.

“Date of VAT register”activating

The Dateof VAT register field is shared globally and can be enabled in legalentities with primary address in any country. To switch on this functionality “Dateof VAT register” configuration key must be enabled in System administration> Setup > Licensing > License configuration underthe General ledger > Sales tax > Transaction date forVAT register period:

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When “Dateof VAT register” configuration key is enabled, user can define additionallyfor sales tax transactions date of tax point by using Date of VAT registerfield.

Date ofVAT register” field appears in more than 20 forms. These forms includejournals, sales orders, purchase orders, free-text invoices, vendor invoicejournals, and project invoices. When you update or post the documents, alltaxes are posted by using the corresponding date of the VAT register, and thedate is included on forms such as the customer and vendor invoice journals forms.

Note, thatsystem doesn’t allow to post an invoice with value of “Date of VAT register”field in a closed interval of sales tax settlement period.

Date ofVAT register” field appears also in the following reports:

  • Generalledger > Reports > Reconciliation > Sales tax > Specification
  • Generalledger > Reports > Reconciliation > Transactions > Sales taxtransactions
  • Generalledger > Reports > Reconciliation > Transactions > Groupings > Salestax transactions - details
  • Generalledger > Reports > Reconciliation > Transactions > Groupings > Salestax specification by ledger transaction

Auto-filling of “Date ofVAT register” value

Date ofVAT register” configuration key enables possibility to select a method of auto-fillingof “Date of VAT register” field via the Date of VAT register filling parameter on the Sales taxgroups form:

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This option fills in automatically “Date of VATregister” field during invoice creation. The following methods are available to select:

  • Manually – novalue will be defined for Date of VAT register field. User can manually definethe value before invoice posting.
  • Document date – valueof Date of VAT register field will be defined automatically on documentdate change.
  • Posting date - valueof Date of VAT register field will be defined automatically on postingdate change.
  • Last delivery date - thedate of last packing slip (for sales order) or product receipt (for purchaseorder) will be populated as Date of VAT register of the invoice.

“Date of VAT register”filling after invoice posting

If for somereason an invoice is posted with empty “Date of VAT register” field, itis still possible to fill it in. To do so, open General ledger > Inquires> Tax > VAT register transactions form. This formrepresents sales tax transactions with empty “Date of VAT register”field. You may select one record for update or a set of records. To define thevalue for Date of VAT register field of the select record(s), click “Dateof VAT register” button on the Action pane of the form and specify thevalue in the “Date of VAT register” field of the dialog. Updated record(s)will be automatically filtered out from the list of records on the VATregister transactions form.

Systemdoesn’t allow to update “Date of VAT register” field with a value in aclosed interval of sales tax settlement period.

“Date of VAT register” impacton VAT settlement and reporting

When “Date of VAT register”configuration key is enabled, user in legal entity with primary address inItaly will be able to activate “Date of VAT register” parameter on Generalledger parameters form:

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When this parameter isswitched on, sales tax settlement process (General ledger > Periodic> Sales tax payments > Sales tax payments) and “Italiansales tax payment report” will consider sales tax transactions by “Dateof VAT register” instead of date of transaction posting.

Note, that system will notallow:

  • to switch On “Date of VAT register”parameter in General ledger parameters form if there are taxtransactions posted in open interval of sales taxsettlement period with value of “Date of VAT register” field in a closedinterval of sales tax settlement period.
  • to switch Off “Date of VAT register”parameter in General ledger parameters form if there are taxtransactions with value of “Date of VAT register”field in a closed interval of sales tax settlement period but postedin open interval of sales tax settlement period.

“Sales tax transactionsextension” consistency check

Date of VAT register” field is physically stored in a TaxTrans_Wtable which is an extension of TaxTrans table. When a company switches on “Date of VAT register” parameter in General ledger parameters form, data source querieson some forms in the system starts working differently, joining the TaxTrans_Wtable. It is possible that user will not be able to see tax transactions postedin the past period. It is because there are no corresponding transactions inTaxTrans_W table because it was not used in the past.

To avoid this issue, we recommend running “Sales tax transactionsextension” consistency check. Open System administration > Periodic> Database > Consistency check form and mark Program> General ledger > Sales tax > Sales tax transactionsextension check box (you don’t need to mark the parent checkboxes if youwant to run only Sales tax transactions extension check):

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Run “Sales tax transactions extension” consistency check with:

  • Check” option to find out if there are missing transactions in TaxTrans_W table in your system. As a result, systemwill inform you about how many transactions in TaxTrans table misscorresponding records in TaxTrans_W table.
  • Fix” option if you want to compensate missing records in TaxTrans_Wtable. As a result, system will insert corresponding records to the TaxTrans_Wtable and Posted sales tax transaction in the past periods will be seen againeverywhere in the system.

Make sure that you have chosen the right date in From date on thedialogue. Leave From date field blank if you want to recover all the taxtransactions in the system.

Sales tax transactions extension” consistency check is availablewhen Date of VAT register” configurationkey.

Changes in the Italiansales tax payment report

You may run “Italian salestax payment report” via the following menu items:

  • General ledger > Reports> Transactions > Sales tax (Italy)
  • General ledger > Periodic >Sales tax payments > Sales tax payments
  • General ledger > Reports> External > Sales tax payments, Sales tax (Italy)button
  • General ledger > Reports> External > Sales tax payments, Print report button(when Italian report layout is defined for the Sales tax authorityspecified for the Sales tax settlement period of the selected Sales tax paymentline)

Date of VAT register” parameter on General ledger parametersform doesn’t impact on list of invoices represented on Sales tax booksection(s) page(s), all the invoices posted in the related Sales tax booksections during the selected period will be included into the report.Nevertheless, resulting amounts of VAT will be calculated depending on “Dateof VAT register” parameter on General ledger parameters form:

  • when “Date of VAT register”parameter on General ledger parameters form is switched On – by “Dateof VAT register” of tax transactions in the period.
  • when “Date of VAT register”parameter on General ledger parameters form is switched Off – by postingdate of tax transactions in the period.

When “Date of VAT register” parameter on General ledgerparameters form is switched On, “Italian sales tax payment report”will additionally provide the following information:

1.      Pagesof sales tax books sections: new “Date of VAT point (Date of VAT register)” (inItalian: “Momento di effettuazione dell’operazione”) column – represents thevalue of “Date of VAT register” of tax transaction.

2.      Totalsby each sales tax book section is represented in three groups:

  • Operations in the actual period withcompetence date in the actual period
  • Operations in the actual period withcompetence date in the previous period
  • Operations in the next period withcompetence date in the actual period

3.      Totalsby sales and purchase books are represented in three lines:

  • Total operations in the actual period withcompetence date in the actual period
  • Total operations in the actual period withcompetence date in the previous period
  • Total operations in the next period withcompetence date in the actual period

4.      Summarysection which represent total VAT amounts by sales tax books sections groupedby sales tax book sections, is represented separately in three parts:

  • Operations in the actual period withcompetence date in the actual period
  • Operations in the actual period withcompetence date in the previous period
  • Operations in the next period withcompetence date in the actual period

5.      Totalson summary section which represent total VAT amounts by sales tax bookssections grouped by sales tax book sections, is represented separately in threelines:

  • Total operations in the actual period withcompetence date in the actual period
  • Total operations in the actual period withcompetence date in the previous period
  • Total operations in the next period withcompetence date in the actual period

Additionally,“Total calculated considering competence date” amount is provided in a separateline.



Hotfix information


How to obtain the Microsoft Dynamics AX updates files

This update is available for manual download and installation from the Microsoft Download Center.  
 
Prerequisites

You must have one of the following products installed to apply this hotfix:

  • Microsoft Dynamics AX 2012 R3
Restart requirement
You must restart the Application Object Server (AOS) service after you apply the hotfix.

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https://mbs.microsoft.com/support/newstart.aspx

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