What is the use of the parameter DEFVATRAT?

1 minute read time.

VAT rate by default (DEFVATRAT) parameter is the default VAT rate that will be used when generating an asset or an expense.

Functions associated to this parameter are

  1. Fixed assets, Fixed assets, Assets (GESFAS)
  2. Fixed assets, Fixed assets, Expenses (GESLOF).

In Setup, General parameters, Parameter values, Fixed assets chapter, AAS and Tax management group, VAT, DEFVATRAT

Let's look at the functions that this parameter is used.

Fixed assets function: generate an asset in GESFAS

  • Note – Prior to creating an asset, the “fiscal & accounting” context of the company must have been defined.

Invd VAT rate = 20

  • This field enables the user to enter the CoA invoiced VAT rate of the financial asset. In creation mode, this rate can be entered, or it will default the value entered in DEFVATRAT.
  • If the asset is generated by capitalization the expenses, the displayed rate is taken from the main expense. This has no significance: The invoiced VAT amount is not calculated but forced with the total of invoiced VAT amounts of the attached expenses.

Expenses function: generate an asset by capitalizing the expenses:

  • Note – make sure the GL accounts that generate expenses are tax managed or subjected to tax if the expenses are subjected to tax.

Invd VAT rate = 5

  • In this example the invoiced VAT rate is 5 and it is forced from the attached expenses.

In GESLOF expenses function you can see that the invoiced VAT rate is set to 5

To conclude, during asset direct creation invd VAT rate will default based on the DEFVATRAT parameter value, but when generating an asset by capitalizing an expense, the invd VAT rate is forced from the expenses.

Similarly, when the expense has a zero invd VAT rate, the asset invd VAT rate is also zero.