Normal VAT

Use this option to have the program calculate VAT for items sold or purchased with this particular combination of business posting group and product posting group code.

Reverse Charge VAT

Use this option when you trade with other countries/regions within the EU where the purchaser must calculate and settle VAT accounts with the tax authorities.

Also remember to fill in the Reverse Chrg. VAT Acc. field.Selecting this option has no effect on your company's financial statements. When you sell goods with reverse charge tax, you neither calculate nor withhold tax. When you purchase goods, the program will calculate the tax amount, debit the purchase tax account and credit the reverse charge tax account.

Full VAT

Use this option when the amount you want to post that has this particular combination of tax business posting group and tax product posting group consists entirely of tax. This option can be useful if, for example, you make a corrective entry in order to correct a tax calculation error.

Sales Tax

This option is only used if the program must handle US sales tax instead of VAT.