/visma-net-erp/help/vat/manage-taxable-documents section 2026-02-19T17:09:06+01:00 # Manage taxable documents /visma-net-erp/help/vat/manage-taxable-documents/about-vat-amount-validation-in-documents page Visma Net provides you with the functionality of validating the VAT amounts in supplier documents that you enter into the system. 2026-02-19T17:09:06+01:00 # About VAT amount validation in documents Visma Net provides you with the functionality of validating the VAT amounts in supplier documents that you enter into the system. Visma Net provides you with the functionality of validating the VAT amounts in supplier documents that you enter into the system. To make the system to validate the VAT amount in a document, you need to enter the control VAT amount in the **'VAT amount** field while adding a document on a document entry window. > [!NOTE] > The system validates the VAT amount that you have specified in a document only if the **Net/gross entry mode** functionality is enabled in the [Enable/disable functionalities (CS100000)](/visma-net-erp/help/common-settings/enable-or-disable-functionalites/enable-disable-functionalities-cs100000/) window. To make the **VAT amount** field available in the top part of the document entry window, you need to select the **Validate VAT totals on entry** check box in the preferences window of the corresponding workspace: + The [Supplier ledger preferences (AP101000)](/visma-net-erp/help/supplier-ledger/supplier-ledger-windows/supplier-ledger-preferences-ap101000/) window: To make the VAT amount validation field available in the [Purchase invoices (AP301000)](/visma-net-erp/help/supplier-ledger/supplier-ledger-windows/purchase-invoices-ap301000/) window. + The [Cash management preferences (CA101000)](/visma-net-erp/help/cash-management/cash-management-windows/cash-management-preferences-ca101000/) window: To make the VAT amount validation field available in the [Transactions (CA304000)](/visma-net-erp/help/cash-management/cash-management-windows/transactions-ca304000/) window. With this check box selected, after you have added all the required detail lines in a document, the system will compute the VAT amount according to the tax settings applicable to a document and validate this amount against the VAT amount specified in the validation field. If there is a discrepancy between the VAT amount that you have entered in the **VAT amount** field and the VAT amount computed by the system (that is shown in the **VAT amount column** on the **VAT details** tab), the system does not allow you to process the document until you correct the VAT amount. In that case, you correct the VAT amount manually on the **VAT details** tab. ## VAT amount discrepancies Some discrepancies can appear between the VAT amount computed by the system on the document entry window and the VAT amount specified in the original supplier document. These discrepancies may be caused due to rounding differences, for example, when the VAT amount of the original document was calculated in another system in which the rounding rules are set up differently. The discrepancies can be minor differences in decimals, but nevertheless they should be corrected. If any discrepancy arises and the system shows the corresponding error, you manually correct the VAT amount in the **VAT amount** column of the **VAT details** tab so that it matches the VAT amount of the supplier document. In that case, if the **Net** VAT calculation method has been applied, all the amounts in the document will be exactly the same as in the source document (after you correct the VAT amount manually) and the document will be balanced. If the **Gross** VAT calculation method has been applied, the taxable amounts used by the system for VAT amount calculation can differ slightly from the taxable amounts used for the original document. In that case, the discrepancy (the amount of the difference) that has occurred will be accounted and posted to the corresponding general ledger account. Thus, as a result, the document will contain exactly the same amounts as the source document, but the amount that has appeared due to rounding differences, will be accounted on the respective general ledger account: In that case, the general ledger transaction will look as shown in the following example: |Account|Debit|Credit| |---|---|---| |Supplier ledger account|Total amount|| |Expense account (Line 1)|Amount1|| |Expense account (Line 2)|Amount2|| |Tax payable account|VAT amount|| |Rounding gain/Loss account|Discrepancy amount (the difference due to the rounding amount)|| To account for the discrepancy amount, you need to specify the maximum amount of the difference that can appear due to rounding in the **Rounding limit** field in the [General ledger preferences (GL102000)](/visma-net-erp/help/general-ledger/general-ledger-windows/general-ledger-preferences-gl102000/)window. The system will validate this amount against the discrepancy amount, and if the discrepancy amount does not exceed the limit, the discrepancy amount will be posted to the general ledger accounts specified in the **Rounding gain account/subaccount** field or the **Rounding loss account/subaccount** field in the [General ledger preferences (GL102000)](/visma-net-erp/help/general-ledger/general-ledger-windows/general-ledger-preferences-gl102000/)window. ## VAT exclusive and VAT inclusive amounts in document detail lines Before entering amounts in the detail lines of a document that you enter into the system, you must consider the type of amounts specified in the original supplier document. Depending on the business requirements of the applicable supplier, a document can contain in its detail lines amounts that are either VAT inclusive (net) or VAT exclusive (gross). In Visma Net, you need to specify the VAT calculation mode that the system should use during the validation process. The selected mode defines how the system will compute the VAT and taxable amounts for the document. You select the required mode in the **VAT calculation mode** field (which can be found on several windows, as described below), in which the following options are available: Gross : Select this option if the amounts in the document detail lines include applicable taxes. Net : Select this option if the amounts in the document detail lines do not include taxes. Tax settings : Select this option if the standard tax settings should be applied to the document. This option is used if a tax with one of the following tax calculation methods selected in the **Calculate on** field in the [VAT (TX205000)](/visma-net-erp/help/vat/vat-windows/vat-tx205000/) window is applied to the document: **Calc. on item + VAT amount**, **Calc. on document amount**, and **Calc. on document + VAT amount**. > [!NOTE] > You can specify the **Gross** or **Net** VAT calculation mode only if item-level taxes are applicable to the document or those that have the **Calc. on item amount** option or the **Extract from item amount** option selected in the **Calculate on** field in the [VAT (TX205000)](/visma-net-erp/help/vat/vat-windows/vat-tx205000/) window. The **VAT calculation mode** field is specified on the following levels by using the appropriate windows: **Document**: You select the appropriate option on the **Financial details** tab of the document entry window. This option will be applied for computing tax and taxable amounts in this document. By default, the system fills in this field with the option specified for the supplier location (if applicable) or supplier that you specify for the document, but you can override the default option. **Supplier location** (if applicable): You select the appropriate option on the **General settings** tab of the [Supplier locations (AP303010)](/visma-net-erp/help/supplier-ledger/supplier-ledger-windows/supplier-locations-ap303010/) window. (By default, the system fills in this field with the option specified for the supplier, but you can override this option.) This setting will be applied by default to all documents in which you select this supplier location, but it can be changed for each document. **Supplier**: You select the appropriate option on the **Purchase settings** tab of the [Suppliers (AP303000)](/visma-net-erp/help/supplier-ledger/supplier-ledger-windows/suppliers-ap303000/) window. (By default, the system fills in this field with the option specified for the supplier class, but you can override this option.) This setting will be applied by default to all documents created for this supplier (if the option is not changed at the supplier location or document level). **Supplier class**: You select the appropriate option on the **General settings** tab of the [Supplier classes (AP201000)](/visma-net-erp/help/supplier-ledger/supplier-ledger-windows/supplier-classes-ap201000/) window. This setting will be applied by default to all documents created for the suppliers of this supplier class (if the option is not changed at the supplier, supplier location, or document level). > [!NOTE] > If the VAT zone of a supplier contains a withholding tax, the system automatically sets the VAT calculation mode to **Gross** and makes the **VAT calculation mode** field unavailable for editing. > [!NOTE] > If the VAT zone of a supplier contains a use tax, the system automatically sets the VAT calculation mode to **Net** in documents, and makes the **VAT calculation mode** field unavailable for editing. ## One-line document and multi-line document To speed the process of entering data on a document entry window, the system suggests a possible amount in each line that you add. For example: When you add the first line, the system automatically inserts in the **Ext. cost** column of the line the amount that you have entered in the amount validation field in the top part of the document entry window. > [!NOTE] > You can enable the amount validation functionality for the document by selecting the corresponding check box in the workspace preferences window (for example, the **Validate document totals on entry** in the [Supplier ledger preferences (AP101000)](/visma-net-erp/help/supplier-ledger/supplier-ledger-windows/supplier-ledger-preferences-ap101000/) window). This functionality allows the system to validate the amount that you enter in the amount validation field of the document entry window (for example, in the **Amount** field in the [Purchase invoices (AP301000)](/visma-net-erp/help/supplier-ledger/supplier-ledger-windows/purchase-invoices-ap301000/) window). The name of the check box that activates this functionality and the name of the validation field in the document entry window can differ depending on the document and the workspace. The suggested amount is exactly the same as the control amount you have entered (if the **Gross** VAT calculation mode is specified for a document), or this amount is recalculated according to the rate of the applied tax or taxes or the amount minus the applicable VAT amounts (if the **Net** VAT calculation mode is specified). You leave the **ext. cost** amount as it is if the document has only one line. If the document has multiple lines, you manually correct the first **ext. cost** amount in the document entry window based on the amount specified in the first line of your source document. When you add the second detail line, the system suggests the residual amount (the difference between the total document amount and the amount that you have specified in the first line) in the **Ext. cost** column of the second line; correct this amount if needed. The process proceeds similarly for any additional lines that you need to add. You can leave the suggested amount or correct it. > [!NOTE] > If you do not want the system to suggest residual amounts while you add the detail lines, do not fill in the amount validation field until you have added all required detail lines to the document. After you have added all required detail lines to the document entry window, the system compares the VAT amount (or amounts) computed on the **VAT details** tab to the control value you have entered in the **VAT amount****validation** field of the window. The document is balanced if the VAT amounts are the same; the system generates an error if there is any discrepancy. /visma-net-erp/help/vat/manage-taxable-documents/about-vat-calculated-for-documents-with-cash-discounts page To meet the requirements of European value-added tax (VAT) legislation on discounts for early payments (also known as prompt payment discounts, or cash discounts in Visma Net ), in documents (such as invoices) for which the full payment has been received within the cash discount period, the VAT amount must be calculated based on the discounted taxable amount. 2026-02-19T17:09:06+01:00 # About VAT calculated for documents with cash discounts To meet the requirements of European value-added tax (VAT) legislation on discounts for early payments (also known as prompt payment discounts, or cash discounts in Visma Net ), in documents (such as invoices) for which the full payment has been received within the cash discount period, the VAT amount must be calculated based on the discounted taxable amount. To meet the requirements of European value-added tax (VAT) legislation on discounts for early payments (also known as **prompt payment discounts**, or **cash discounts** in Visma Net), in documents (such as invoices) for which the full payment has been received within the cash discount period, the VAT amount must be calculated based on the discounted taxable amount. If the payment is received after the cash discount period, the VAT amount is calculated based on the non-discounted taxable amount of a document. Thus, VAT is to be calculated based on the payment that was actually received by the supplier; as a result, the customer recovers the amount of VAT that has been actually paid. ## How it works in Visma Net > [!NOTE] > This functionality is available only if the **VAT reporting** functionality is enabled in the [Enable/disable functionalities (CS100000)](/visma-net-erp/help/common-settings/enable-or-disable-functionalites/enable-disable-functionalities-cs100000/) window. In Visma Net, when you initially enter a document (such as an invoice), the system shows the VAT amount calculated on the full document amount, because when you enter an invoice, you do not know whether the discount will be taken. However, in the invoice, you specify the appropriate cash discount terms (in the **Terms** field), so the system calculates the discounted taxable amount and tax amount that can be applied if the terms are met. You can view these discounted amounts (**VAT on discounted price** and **Discounted taxable total**) in the **Cash discount info** section on the **Financial details** tab of the [Purchase invoices (AP301000)](/visma-net-erp/help/supplier-ledger/supplier-ledger-windows/purchase-invoices-ap301000/) window. If the invoice is fully paid within the cash discount period or if the **Payment** for the invoice is released in the [Customer payments (AR302000)](/visma-net-erp/help/customer-ledger/customer-ledger-windows/customer-payments-ar302000/) window, the cash discount is to be applied to that invoice. In this case, the system leaves the status of the invoice as **Open** and makes its balance equal to the appropriate cash discount amount (which has been specified in the **Cash discount** field). This invoice appears in the list of documents in the [Generate VAT on cash discount (AR504500)](/visma-net-erp/help/customer-ledger/customer-ledger-windows/generate-vat-on-cash-discount-ar504500/) window. In this window, you should generate the credit note for the invoice in which the corresponding cash discount amount is specified. This credit note will be automatically applied to the invoice, and after that, this invoice will be **Closed**. > [!NOTE] > After you have generated a credit note, the invoice will be closed automatically only if the **Automatically release credit notes** check box is selected in the **VAT recalculation settings** section in the [Release customer documents (AR501000)](/visma-net-erp/help/customer-ledger/customer-ledger-windows/release-customer-documents-ar501000/) window. Otherwise, you need to release the credit note in the [Release customer documents (AR501000)](/visma-net-erp/help/customer-ledger/customer-ledger-windows/release-customer-documents-ar501000/) window manually. ## Configuring a VAT used for documents that are paid early If a VAT applies to your company and your company offers cash discounts to documents for which the payment is made in time to qualify for the discount, then you need to configure the appropriate VAT in the system. You configure the tax of the **VAT** type in the [VAT (TX205000)](/visma-net-erp/help/vat/vat-windows/vat-tx205000/) window and select the **Reduce taxable amount on early payment** option in the **Cash discount** field. Later, if a document with this tax applied is paid in full before the cash discount date specified in the invoice (**Cash discount date**), you will be able to generate a credit note to adjust the VAT and taxable amounts of the invoice. ## Generating credit notes In the [Generate VAT on cash discount (AR504500)](/visma-net-erp/help/customer-ledger/customer-ledger-windows/generate-vat-on-cash-discount-ar504500/) window, you can view the list of the documents for which the full payment has been made before the final date of the cash discount period. In this window, you can process the generation of a credit note or credit notes (for a document or documents that you select) or credit notes (for all listed documents) by clicking **Process** or **Process all**, respectively. Depending on whether you clear or select the **Consolidate credit notes by customer** check box in the [Generate VAT on cash discount (AR504500)](/visma-net-erp/help/customer-ledger/customer-ledger-windows/generate-vat-on-cash-discount-ar504500/) window before processing, you can generate a credit note for each particular document or one credit note for a group of documents with similar properties, such as branch, customer, customer location, currency, customer account (and customer subaccount, if applicable), and VAT zone. ## Setting up the automatic release of credit notes Generated credit notes can be released automatically by the system if you select the **Automatically release credit notes** check box in the **VAT recalculation settings** section in the [Customer ledger preferences (AR101000)](/visma-net-erp/help/customer-ledger/customer-ledger-windows/customer-ledger-preferences-ar101000/) window. > [!NOTE] > If the **Automatically release credit notes** check box is cleared in your system, check that all generated credit notes are released in the [Release customer documents (AR501000)](/visma-net-erp/help/customer-ledger/customer-ledger-windows/release-customer-documents-ar501000/) window, because the system closes the document automatically only after the corresponding credit note is released. Related tasks [Create a value-added tax](/visma-net-erp/help/vat/manage-taxes/create-a-vat/) Related reference [VAT (TX205000)](/visma-net-erp/help/vat/vat-windows/vat-tx205000/) /visma-net-erp/help/vat/manage-taxable-documents/recognition-of-pending-vat-overview page In the VAT (TX205000) window of Visma Net, you can configure a value-added tax (VAT) of the Pending type to be applied to those documents whose VAT amounts should be recognised after the document has been released. 2026-02-19T17:09:06+01:00 # Recognition of pending VAT - overview In the VAT (TX205000) window of Visma Net, you can configure a value-added tax (VAT) of the Pending type to be applied to those documents whose VAT amounts should be recognised after the document has been released. For more information: [VAT (TX205000)](/visma-net-erp/help/vat/vat-windows/vat-tx205000/). In the [VAT (TX205000)](/visma-net-erp/help/vat/vat-windows/vat-tx205000/) window of Visma Net, you can configure a value-added tax (VAT) of the **Pending** type to be applied to those documents whose VAT amounts should be recognised after the document has been released. Once a document that is subject to a **Pending** VAT is released, the system records its VAT amount to an intermediate account (such as the Pending tax payable account or the Pending tax claimable account), where the VAT amount is kept until a user initiates the process of recognising the taxes. When you run the recognition process, the system generates a general ledger transaction that moves the VAT amount from the intermediate (pending) account to the actual Tax payable or Tax claimable account. > [!NOTE] > The VAT amounts recorded to the pending accounts are not included in the VAT report. Only when the recognition of taxes is performed does the system include the corresponding VAT information in the VAT report of the appropriate period. The functionality related to value-added taxes is available only if the **VAT reporting** functionality is enabled in the [Enable/disable functionalities (CS100000)](/visma-net-erp/help/common-settings/enable-or-disable-functionalites/enable-disable-functionalities-cs100000/) window. ## VAT recognition methods In Visma Net, you can use either of the following methods of recognising the pending value-added taxes: On documents : With this recognition method, the total VAT amount of a document can be recognised on any needed date. The system does not take into account payments in this case. You load the released documents with the pending VAT applied in the [Recognise input VAT (TX503500)](/visma-net-erp/to-be-deleted/help/vat/vat-windows/recognise-input-vat-tx503500/) window or the [Recognise output VAT (TX503000)](/visma-net-erp/to-be-deleted/help/vat/vat-windows/recognise-output-vat-tx503000/) window, and then initiate the recognition process. On payments : With this recognition method, the VAT amount is recognised only when a payment is applied to a document. The VAT amount can be recognised fully or partially, depending on whether the applied payment fully or partially covers the document amount. The partial VAT amount to be recognised, if applicable, is calculated proportionally to the payment applied to a document. You load the released applications in the [Recognise input VAT (TX503500)](/visma-net-erp/to-be-deleted/help/vat/vat-windows/recognise-input-vat-tx503500/) window or the [Recognise output VAT (TX503000)](/visma-net-erp/to-be-deleted/help/vat/vat-windows/recognise-output-vat-tx503000/) window, and then initiate the recognition process for one application or multiple applications. Each VAT amount is recognised on the date when the payment has been applied to document. ## Setup of recognition methods To set up the recognition process, you specify the appropriate recognition method for each required tax agency on the **Tax agency settings** tab of the [Suppliers (AP303000)](/visma-net-erp/help/supplier-ledger/supplier-ledger-windows/suppliers-ap303000/) window. In the **VAT recognition method** field, you select either **On documents** or **On payments**. Before you initiate the VAT recognition processin the [Recognise input VAT (TX503500)](/visma-net-erp/to-be-deleted/help/vat/vat-windows/recognise-input-vat-tx503500/) window or the [Recognise output VAT (TX503000)](/visma-net-erp/to-be-deleted/help/vat/vat-windows/recognise-output-vat-tx503000/) window, you select a tax agency in the **Tax agency** field. The system inserts the recognition method of the selected tax agency in the **VAT recognition method** field. If needed, you can change the recognition method manually before you run the recognition process. The next topics describe initiating of the VAT recognition process for both of these methods in detail. /visma-net-erp/help/vat/manage-taxable-documents/about-recognising-the-pending-vat-on-documents page By using the On documents VAT recognition method, you recognise VAT amounts calculated in the unpaid documents that are subject to pending VAT. 2026-02-19T17:09:06+01:00 # About recognising the pending VAT on documents By using the On documents VAT recognition method, you recognise VAT amounts calculated in the unpaid documents that are subject to pending VAT. By using the **On documents** VAT recognition method, you recognise VAT amounts calculated in the unpaid documents that are subject to pending VAT. You can initiate the recognition process by using any needed date. ## Initiation of the VAT recognition process You initiate the process of recognising the pending VAT the [Recognise input VAT (TX503500)](/visma-net-erp/to-be-deleted/help/vat/vat-windows/recognise-input-vat-tx503500/) window or the [Recognise output VAT (TX503000)](/visma-net-erp/to-be-deleted/help/vat/vat-windows/recognise-output-vat-tx503000/) window, depending on whether input or output taxes should be recognised. In one of these windows, you specify the following selection criteria, which the system uses to load the documents: Date : The documents with a date earlier than or the same as the specified date are loaded. By default, the current business date is specified. To load the documents with any date to the window, clear this field. Branch : The branch from which documents are loaded. Tax agency : The tax agency that is associated with the VAT of the **Pending** type to be processed. VAT ID : The VAT code that was used for calculating the VAT amounts to be recognised by the process. Only the VAT codes associated with the selected tax agency are available for selection. You can leave this field empty, so that the documents subject to all available pending taxes associated with the agency will be loaded. In the top part, you should also make sure the **VAT recognition method** is **On documents**. By default, the option specified for the tax agency you have selected is shown. Once the documents are loaded to the table, you select one item or multiple items in the list, and initiate the process by clicking **Process** in the window toolbar. (To process all listed items, you click **Process all**.) > [!NOTE] > For each document to be processed, the **VAT doc. no.** value should be specified in the table. This number is either inserted by the system automatically or entered by a user manually, depending on the option specified for the tax agency in the **Input VAT entry ref. no.** or **Output VAT entry ref. no.** field on the **Tax agency settings** tab of the [Suppliers (AP303000)](/visma-net-erp/help/supplier-ledger/supplier-ledger-windows/suppliers-ap303000/) window. When you run the process of recognising the pending VAT, the system generates a general ledger batch (or multiple batches) to move the VAT amounts from the pending accounts to the actual VAT payable (or VAT claimable) accounts. ## Example of general ledger transactions generated when pending VAT is processed This section provides an example of the general ledger transactions that the system generates when it processes a customer invoice that is subject to pending VAT. Suppose your company issues a €1000 invoice dated 01.01.2020 for services. The services are subject to a 7% VAT. When this invoice is released in the system, the system creates the following entries in the General ledger. |**Account**|Date|Debit|Credit| |---|---|---|---| |Customer ledger|01.01.2020|1070|-| |Sales (as an example)|01.01.2020|-|1000| |Pending VAT payable|01.01.2020|-|70| On 01.31.2020, you run the VAT recognition process. The system generates the following general ledger transactions once the VAT recognition is completed. |**Account**|Date|Debit|Credit| |---|---|---|---| |Pending VAT payable|01/31/2020|70|-| |VAT payable|01/31/2020|-|70| You can view the generated general ledger transactions in the [Journal transactions (GL301000)](/visma-net-erp/help/general-ledger/general-ledger-windows/journal-transactions-gl301000/) window by using the **Batch number** link available in the table. > [!NOTE] > You specify the Pending VAT payable account and the VAT payable account (as well as the Pending VAT claimable account and the VAT claimable account) for each particular VAT code on the **General ledger accounts** tab of the [VAT (TX205000)](/visma-net-erp/help/vat/vat-windows/vat-tx205000/) window. The amounts posted to the VAT payable or VAT claimable account will be included in the VAT report, which you create in the [Prepare VAT report (TX501000)](/visma-net-erp/help/vat/vat-windows/prepare-vat-report-tx501000/) window. Parent topic: [Recognition of pending VAT - overview](/visma-net-erp/help/vat/manage-taxable-documents/recognition-of-pending-vat-overview/)

Related pages

Concepts

• About recognising the pending VAT on payments
• About VAT report preparation
• Create a VAT

/visma-net-erp/help/vat/manage-taxable-documents/about-recognising-the-pending-vat-on-payments page In certain countries, there are legal requirements that VAT must be recognised, accrued, and included in the VAT report at the time of payment. 2026-02-19T17:09:06+01:00 # About recognising the pending VAT on payments In certain countries, there are legal requirements that VAT must be recognised, accrued, and included in the VAT report at the time of payment. To satisfy these requirements, in Visma Net, you can use the **On payment** VAT recognition method. With this method, you recognise VAT amounts based on the payments applied to documents, so the VAT amount of a document is recognised on the date when the payment was applied to that document. You can recognise the VAT amount fully or partially, depending on whether the payments completely or partially cover the amount of the document. If the document is paid partially, the VAT amount to be recognised is calculated proportionally to the applied payment. ## Initiation of the VAT recognition process You initiate the process of recognising the pending VAT in the [Recognise input VAT (TX503500)](/visma-net-erp/to-be-deleted/help/vat/vat-windows/recognise-input-vat-tx503500/) window or the [Recognise output VAT (TX503000)](/visma-net-erp/to-be-deleted/help/vat/vat-windows/recognise-output-vat-tx503000/) window, depending on whether input or output VAT should be recognised. In one of these windows, you specify the following selection criteria, which the system uses to load applications to the table: Date : Applications with a date earlier than or the same as the specified date are loaded. By default, the current business date is specified. To load the applications with any date to the window, clear this field. Branch : The branch for which documents (such as supplier invoices) are paid. Tax agency : The tax agency that is associated with the VAT to be processed. VAT ID : The VAT code that was used for calculating the VAT amounts to be recognised by the process. Only the VAT codes associated with the selected tax agency are available for selection. You can leave this field empty, so that the documents subject to all available pending VAT associated with the agency will be loaded. In the top part, you should also make sure the **VAT recognition method** is **On payments**. By default, the option specified for the tax agency you have selected is shown. Once the applications are loaded to the table, you select one item or multiple items in the list, and initiate the process by clicking **Process** in the window toolbar. (To process all listed items, you click **Process all**.) > [!NOTE] > If you have reversed a payment application (a payment applied to a document subject to pending VAT), you have to process the application reversal in the [Recognise input VAT (TX503500)](/visma-net-erp/to-be-deleted/help/vat/vat-windows/recognise-input-vat-tx503500/) window or the [Recognise output VAT (TX503000)](/visma-net-erp/to-be-deleted/help/vat/vat-windows/recognise-output-vat-tx503000/) window. When you run the process of recognising the pending VAT, the system generates a general ledger batch (or multiple batches) to move the VAT amounts from the pending accounts to the actual VAT payable (or VAT claimable) accounts. If only partial payment has been applied to a listed document, the system calculates the amount of the VAT to be recognised proportionally to the payment that was applied to document amount. ## Example of general ledger transactions generated when partial payment has been applied This section provides an example of the general ledger transactions that the system generates when a partial payment has been applied and recognised. Suppose your company issues a €1000 invoice dated 01.01.2020 for services. The services are subject to a 7% VAT, which should be recognised after the payment is received. When this invoice is recorded in the system, the system creates the following entries in the General ledger. |**Account**|Date|Debit|Credit| |---|---|---|---| |Customer ledger|01.01.2020|1070|-| |Pending VAT payable|01.01.2020|-|70| |Services|01.01.2020|-|1000| On 20.1.2020, the customer pays €535, which is half of the amount it must pay for the services plus the €35 VAT amount (7% of €500). This VAT amount must be recognised and posted to the General ledger once this payment is processed. As a result, the system creates the following entries in the General ledger. |**Account**|Date|Debit|Credit| |---|---|---|---| |Pending VAT payable|20.1.2020|35|-| |VAT payable|20.1.2020|35|| The VAT report that is generated at the end of the period, on 31.1.2020, will include €35 of output VAT and €535 of taxable sales. > [!NOTE] > If the **Multi-currency accounting** functionality is enabled in the [Enable/disable functionalities (CS100000)](/visma-net-erp/help/common-settings/enable-or-disable-functionalites/enable-disable-functionalities-cs100000/) window, the system generates recognition entries in the currency of the document being paid by using the document's exchange rate. Parent topic: [Recognition of pending VAT - overview](/visma-net-erp/help/vat/manage-taxable-documents/recognition-of-pending-vat-overview/)

Related pages

Concepts

• About VAT report preparation
• Create a VAT