How EC Company, Company pays tax and the Tax Ref affect the VAT Return

Overview

When setting up EC companies it is useful to understand what happens when the following fields on the Customer General screen are used:

For all the following both the Tax and EU checkboxes in System Data Countries are ticked.

EC Company	Company pays tax	Tax Ref	Result
Toggle Green	Toggle Green	Added	Appears on the Tax Register EC with NO VAT
Toggle Green	Toggle Green	Not added	Appears on the Primary Tax Register with VAT
Toggle Red	Toggle Red	Added	Appears on the Primary Tax Register with NO VAT
Toggle Green	Toggle Red	Added	Appears on the Tax Register EC with NO VAT
Toggle Green	Toggle Red	Not added	Appears on the Primary Tax Register with NO VAT

When creating Sales and Purchase Orders, Khaos Control Cloud uses the country table to determine whether or not it should apply tax to the sales order. The Company Pays Tax checkbox will override the result of that check and stop tax being charged. Under current VAT legislation, it is difficult to envisage circumstances in which you would NOT toggle off the Company pays tax option.
It is not possible to change a Tax Reference against an invoice once it has been stamped.
Only orders raised after a Tax Reference is provided will have the tax reference attributed to them.

The following video shows how this affects sales orders and the Tax Register:

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