Business Central: the “VAT Group” Concepts

Business Central: the “VAT Group” Concepts

What is Group VAT Management?

VAT groups are formed of individual companies, ideally to lift the VAT burden within the group. From the perspective of VAT reporting, authorities treat a VAT group as one company, which means one VAT Return submission from the group with “aggregated data for the entire group”.

• You can join one or more businesses in your country to consolidate VAT reporting under a single registration number. This type of arrangement is known as a ”VAT Group”; you can engage with the group as a member or the group representative.
• We will support VAT groups with a set of features that makes this management of inter-group VAT Reporting easy and seamless. Support for Group VAT Management will focus on the inter-group member communication and functionality to prepare a “Group VAT Return”.

 

About the VAT Group “engine”

• Communication happens from group members to the representative. The group representative exposes an API that allows the members to submit their VAT returns to the VAT group representative. Business Central supports inter-group VAT return submissions for companies using Business Central on-premises or online, and in any combination. The setup of the communication depends on the constellation.

 

Understanding the VAT Group Management Setup and Connections

• The VAT group representative exposes an API that VAT group members can use to connect to their Business Central tenant and submit VAT returns. VAT group members will often use Business Central in separate Azure Active Directory tenants. Therefore, more setup is needed to make a connection between the VAT group member and representative’s Business Central.
• VAT group members connect to the representative by calling a web service on the VAT group representative tenant. The caller must be authenticated using OAuth. When the VAT Group Management extension is set up, you will be asked to authenticate to the VAT group representative to get and save an access token. This access token is used when submitting VAT returns to the VAT group representative. Authentication is handled by Azure Active Directory.

 

Some Tests on “BC Cloud 2020 Wave2-DK” Sandbox

Forming a VAT Group

• VAT group members and the group representative can use the VAT Group Management Setup assisted setup guide to define their engagement with the group, and create a connection between their Business Central tenants. The group members will use the connection to submit their VAT returns to the group representative. The representative will submit VAT to tax authorities on behalf of the group using a single VAT return.

Open Assisted Setup: Setup VAT Group Management

First, define a “representative” role in the company MASTER VAT GROUP (emissary responsible for the VAT group report)

After define a “Member” role in another instance \ instances for Group companies using the same assisted setup in all the other instances.

VAT Group Member Setup – APIs for Members Connections

• Set up the VAT group member by starting the Set up VAT Group Management assisted setup; before you get started, contact the VAT group representative for the following information about their Business Central tenant:

Required Information:

• The API URL
• The name of their company
• Client ID
• Client secret
• Sign in credentials for the dedicated user

About APIs Connections

1. To define the company’s VAT group role, choose Member, and then choose Next.
2. Copy the value of the Group Member ID field, and then share it with the VAT group representative so they can add your company as an approved member of the group.
3. Add the API URL from the VAT group representative. Typically, the URL is formatted as follows: https://api.businesscentral.dynamics.com/v2.0/[TENANT-ID]/[ENVIRONMENTNAME]

…or you can use User and Web Service Key (until BC 2021 Wave1 only!, After only OAuth2)

For each member fill in the information necessary for connection and for sending the VAT report

Use OAuth2or Web Service Key (the below case) for connection

After connection, choose a VAT Report Configuration

 

Test Connection

VAT Group Approved Members

• You can see the members currently enabled to VAT Group Reporting on this page

 

Using the VAT Group Management Features

“VAT Report Setup”: Representative perspective

• VAT group members use the standard processes to prepare VAT returns. The only difference is to choose the VATGROUP report version, which submits the VAT return to the VAT group representative rather than the authorities.

 

VAT Group Submissions

• The VAT Group Submissions page lists the VAT returns that members have submitted. The page serves as a draft location for the submissions until the VAT group representative includes them in a VAT return for the group. You can open the submissions to review the VAT for the individual boxes reported by the VAT group member.

“VAT REPORT” version: VATGROUP

Create “VAT Report Retun Card”

“VAT Report Setup”: Member perspective

 

Creating a Group VAT Return

• To report VAT on behalf of the group, on the VAT Returns page, create a VAT return for your company only. Afterward, include the most recent VAT submissions from VAT group members by choosing the “Include Group VAT” action.
• When the VAT Group representative’s VAT Return has been submitted to the authorities on behalf of the entire group, you will normally run the “Calculate and Post VAT Settlement action”. This action closes open VAT Entries and transfers amounts to the VAT Settlement account. Currently, this action does not take the group submissions into account. This means that only the VAT Entries of the VAT Group representative company will be posted. The VAT Group member submission amounts must be posted to the VAT settlement amount manually

From” VAT Return” page you can

• Download Submission Message
• Download Response Message