Normal VAT

With this option, the program calculates VAT for the amount on this line and creates a VAT ledger entry including the amount.

Reverse Charge VAT

This option is used when the line involves trade with another EU country/region, where the purchaser must compute and settle VAT accounts with the tax authorities.

This option has no effect on your company's financial statements. When you sell goods or services with reverse charge VAT, you neither calculate nor withhold VAT. When you purchase goods or services, the program will calculate the VAT amount and debit the purchase VAT account and credit the reverse charge VAT account.

Full VAT

This option is used when the amount you are posting on this line consists entirely of VAT. This option can be useful if, for example, you make a corrective entry in order to correct a VAT calculation error.

Sales Tax

This option is used only if the program is set up to handle US sales tax. The option directs the program to retrieve information from specific sales tax tables and then calculate sales tax instead of VAT.