Setting up payment allocation for VAT only

The VAT ONLY payment allocation type allocates the VAT amount of a payment. When you set the calculation type to VAT amount, the allocation uses the VAT from the actual invoice instead of a fixed VAT percentage from the allocation type. This means that the allocated amount is correct regardless of the VAT rate on the invoice.

For example, if the standard VAT rate is 19 percent and an invoice has 7 percent VAT, the allocation uses the 7 percent from the invoice.

To set up a VAT only payment allocation for a vendor:

1. Search () for and select Vendors.
2. Open the vendor card of the vendor you want to set up the payment allocation for.
3. On the action bar, click Related > Vendor > Payment Allocations.
4. On the Payment Allocations page, fill in the fields. For a description of all fields, see Setting up and managing payment allocations. Pay particular attention to the following fields:
   • Payment Allocation Type Code – select VAT ONLY.
   • Calculation Type – select VAT Amount.
   • Recipient and Recipient Bank Account – select the recipient of the VAT amount and the bank account to transfer it to.

You can also set up the payment allocation on the Banking Export Setup page. For more information, see Setting up and managing payment allocations.