VAT and GST overview

Depending on where you do business, you might need to collect and report on VAT or GST.

About VAT and GST

VAT or GST is a general tax that's applied to the sale of goods and services in many countries. It's considered an indirect, consumption tax because the tax is ultimately borne by the final consumer.

VAT or GST is collected fractionally through a system of partial payments. When a business purchases a good or service, it pays tax on the purchase price, often called the input tax. When a business sells a good or service, it calculates and collects tax on the total sales price, often called the output tax.

Businesses can deduct the amount of input tax they have paid from the output tax they have collected, which ensures that the tax is neutral regardless of how many transactions are involved. The difference between the input and output tax is what businesses need to pay to the tax authorities when filing tax returns.

VAT and GST tax solutions

When your organization is subscribed to the Taxes application, you can use the following tax solutions to calculate, capture, and report on VAT or GST:

  • Australia GST: This standard tax solution provides an automated setup for the tax rates for Australia and customizable templates for tax invoices. Using Intacct's integration with Sage Regulatory Reporting, your Business Activity Statements (BAS) are calculated for you.

  • Canadian Sales Tax: This standard tax solution provides an automated setup for the tax rates for Canadian GST, QST, PST, and HST, and customizable templates for tax invoices. Using Intacct's integration with Sage Regulatory Reporting, your GST34-2 reports are calculated for you.

  • Deutsche Umsatzsteuer: This standard tax solution provides an automated setup for domestic tax rates for Germany and access to GoBD export files and DATEV format file exports. Using Intacct's integration with Sage Regulatory Reporting, your UStVA return is prepared and electronically submitted through ELSTER for you.

  • South Africa VAT: This standard tax solution provides an automated setup for the tax rates for South Africa and customizable templates for tax invoices. Using Intacct's integration with Sage Regulatory Reporting, your VAT201 Declarations are calculated for you and can be submitted electronically or manually.

  • TVA Française: This standard tax solution provides an automated setup for the tax rates for France domestic VAT and a report that can be exported in the Accounting entries file (FEC) format. Using Intacct's integration with Sage Regulatory Reporting, your CA3 VAT returns are calculated for you.

  • United Kingdom VAT: This standard tax solution provides an automated setup for the tax rates for the United Kingdom and customizable templates for sales invoices. Using Intacct's integration with Sage Regulatory Reporting, you can calculate and complete MTD submissions of your VAT tax returns to HMRC.

    Sage Intacct has been through HMRC's recognition process for Making Tax Digital (MTD) for VAT.

  • Custom VAT: You set up a custom tax solution with the tax rates that comply with the rules for your tax jurisdiction and tax authority. We provide some sample templates for invoices. You can create manual tax submissions and mark them as filed. Custom VAT gives you the ability to set up VAT or GST for countries where we do not provide a standard tax solution.

When you use these tax solutions, VAT and GST can be calculated and captured in the following applications:

  • Accounts Payable
  • Accounts Receivable
  • Cash Management
  • General Ledger
  • Order Entry
  • Purchasing
  • Expenses

Learn more in Taxes application overview.

VAT or GST in multinational organizations

If you are a multinational organization, you might have entities in other countries and need to calculate, capture, and report on taxes according to the rules of different tax jurisdictions and submit taxes to multiple tax authorities.

The Taxes application supports both single and multiple tax jurisdictions. With multiple tax jurisdictions, you can use different tax solutions in different entities. In addition to using one or more of the VAT or GST tax solutions, you can also set up and use Avalara AvaTax and Advanced Tax tax solutions. For entities in which you might need to capture sales tax instead of VAT or GST, you can use the Avalara AvaTax or Advanced Tax solutions. You can select No Tax, but you cannot select Simple Tax as your tax solution in the Taxes application.

For example, if you are headquartered in the United Kingdom and have a foreign subsidiary in the Netherlands, you can use the pre-configured United Kingdom VAT tax solution for your entities in the United Kingdom and set up a custom VAT solution for your entities in the Netherlands.

Learn more in Taxes application overview.