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Updates for Latvian VAT declaration format according to changes coming in force since January 1, 2018 and some enhancements to prepayment and credit note scenarios in Microsoft Dynamics 365 for Finance and Operations, Enterprise Edition

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Introduction

The Ministry of Finance in Latvia introduced a tax reform, which is enforced from January 2018. The tax reform includes some changes in the Latvian VAT declaration (PVN declaration). Changes are presented in certain appendixes of the declaration:

  • Appendix <PVN> - new elements are introduced:

Element

Description in Latvian

Description in English

R421

Ar PVN 5 % likmi apliekamie darījumi

Taxable amount with reduced VAT rate 5%

R451

Uz ES dalībvalstīm piegādātās preces, kas minētas likuma 42.panta sešpadsmitajā

Goods delivered to EU member states according Sec.16 L. 42

R511

No ES dalībvalstīm saņemtās preces (PVN 5 % likme)

Goods received from EU member states (VAT 5% rate)

R531

Ar PVN 5 % likmi apliekamiem darījumiem

Tax amount with reduced VAT rate 5%

R561

Ar PVN 5 % likmi apliekamām precēm, kas saņemtas no ES dalībvalstīm

VAT amount with VAT rate 5% on goods received from EU
  • Appendix <PVN> - existed element's calculation changed:

Element

Description in Latvian

Description in English

New formula

R43

Ar PVN 0 % likmi apliekamie darījumi, tai skaitā

Base amount with 0% VAT rate, including

R43 = R44 + R45 + R451 + R46 + R47 + R48 + R481
  • Appendix <PVN> - R42 element's name changed:

Element

New description in Latvian

New description in English

R42

Ar PVN 12 % likmi apliekamie darījumi

Taxable amount with reduced VAT rate 12%
  • Appendix <PVN1I>, <DarVeids> tag (Transaction type) - starting from the 1st of January 2018, a new threshold amount of EUR150 is applied on transaction amount excluding taxes to identify the Transaction type.
  • Appendix <PVN1III>, <DokVeids> tag (Type of document) - starting from the 1st of January 2018, a new threshold amount of EUR150 is applied on transaction amount excluding taxes to identify the Transaction type.
  • Appendix < PVN1I> - new codes are introduced in xml element <DarVeids>:

Code

Code description

C

Light vehicle acquisition and import

R4

Electronic related business

R5

Grain related business

R6

Precious metal related business

R7

Metal products and services related business

R8

Household electronic devices and household electronic appliances related business

R9

Construction products related business

<DpNumurs> tag (VAT Registration Number) – should report a counterparty's VAT registration number without a corresponding national code.

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Overview

This hotfix provides a new format for Latvian VAT declaration according to the requirement introduced by tax reform, which is enforced from January 2018:

  • Business type field (Tax > Sales tax > Sales tax codes) list of values was extended with the new values:

New “Business type” field value

Description

C

Light vehicle acquisition and import

R4

Electronic related business

R5

Grain related business

R6

Precious metal related business

R7

Metal products and services related business

R8

Household electronic devices and household electronic appliances related business

R9

Construction products related business

 

This image shows the new values extending in the Business type field.

  • Invoice threshold user input parameter is added on report dialog so, user can set up on report generation the valid value which should be applied on identification of values for Transaction type and Type of document tags respectively.

This image shows you to add an invoice threshold value.

  • <DpNumurs> tag value (VAT Registration Number) on the report is updated to print a counterparty's VAT registration number without a corresponding national code.
  • New tags were added to the format: R421, R451, R511, R531, R561.
  • Existing R43 element calculation is updated: R43 = R44 + R45 + R451 + R46 + R47 + R48 + R481.

Moreover, this hotfix provides several version independent changes:

  1. Algorithm of a threshold implementation is changed according to the following definition of the transaction: consider a counterparty's transaction as a subject to apply a threshold.
  2. Algorithm of transactions grouping is changed to group transactions with the same Code (PVN deklaracijas rindas Nr.) within an invoice.
  3. Credit notes scenario reflection on the report is updated:

Scenario group / subgroup

Scenario description

Reporting

Issued credit notes (AR/sales)

Invoice and related credit note are in the same (current) period

An invoice and a credit note have the same reference document number and the same amount and tax amount.

Both documents (the invoice and the related credit note) should be not be reported.

An invoice and related credit note have different amounts and/or tax amounts and VAT rate is 21%.

Credit note should be reported in Appendix I as positive.

An invoice and related credit note have different amounts and/or tax amounts and VAT rate is NOT 21%.

Credit note should be reported in Appendix III as negative.

Invoice and related credit note are in different periods

Credit note is posted in different period, then the related invoice and VAT rate is 21%

Credit note should be reported in Appendix I as positive.

 

Credit note is posted in different period, then the related invoice and VAT rate is NOT 21%.

Credit note should be reported in Appendix III as negative.

Received credit notes (AP/purchase)

Credit note posted in any period

Credit note is posted in different period, then the related invoice and any VAT rate.

Credit notes should be reported in Appendix I as negative.
  1. Pre-payment scenario reflection in the report is updated:

Scenario group / Scenario description

Reporting

Pre-payment is posted and the related invoice is posted in the same period

Pre-payment amount = Invoice amount

Report for period should include invoice-based information.

Prepayment amount < Invoice amount.

Report for period should include invoice-based information.

Prepayment amount > Invoice amount.

In this case, the rest of the prepayment should be settled in the same period with a reverse payment of difference: (Prepayment amount - Invoice amount).

Report for period should include invoice-based information.

Report for period should include reverse of difference: (Prepayment amount - Invoice amount) in relation with reverse payment on difference document (doc.number, date) and Box6 = "4".

Pre-payment is posted in one period and the related invoice is posted in the next period

Pre-payment amount = Invoice amount

Report for period where pre-payment is posted should include all the prepayment amount. Box6 = "3".

No prepayment, no invoice should be reported on the report for the next period when the invoice is posted.

Prepayment amount < Invoice amount.

Report for period where pre-payment is posted should include all the prepayment amount. Box6 = "3".

Report for the next period when the invoice is posted should include difference: (Invoice amount – Prepayment amount) in relation with invoice (doc.number, date) and Box6 = "1".

Prepayment amount > Invoice amount.

In this case, the rest of the prepayment should be settled in invoice period with a reverse payment of difference: (Prepayment amount - Invoice amount).

Report for period where pre-payment is posted should include all the prepayment amount. Box6 = "3".

Report for the next period when the invoice is posted should include reverse of difference: (Prepayment amount - Invoice amount) in relation with reverse payment on difference document (doc.number, date) and Box6 = "4".

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Setup

To setup your Microsoft Dynamics 365 for Operations, do the following steps:

1. Download and import Data entity for Reporting codes table: Latvian VAT declaration – SalesTaxReportingCodes.

This image shows you how to download and import Data entity for Reporting codes table: Latvian VAT declaration – SalesTaxReportingCodes.

2. Download and import the updated GER configurations: VAT declaration model.version.3.xml, VAT declaration (LV).version.3.2.xml.

This image shows you how to download and import the updated GER configurations: VAT declaration model.version.3.xml and VAT declaration (LV).version.3.2.xml.

3. Download and install update packages according to the prerequisites in the GER configuration and documentation.

Set up of the new VAT declaration (LV) format schema version should not replace the previous format schema version which should remain available for usage for reporting purposes the previous periods. Thus, to avoid its accidental loss during the version upgrade, it is recommended to complete the format which was set up and used for your company and save it in XML format using "Export as XML file" function.

To set up new format schema version and use it for reporting in periods of 2018 year, the following steps should be done:

  1. Don't remove previously set up for the VAT declaration (LV) format– it will be used for reporting in periods.
  2. Download new format from the LCS: VAT declaration (LV).version.3.xml.
  3. The format is linked with an updated version of the model: VAT declaration model.version.xml.
  4. Select "VAT declaration (LV)" format in Electronic Reporting and import downloaded files (p.1-3) using "Load from XML file" function in menu on Versions fast tab. New versions should appear for: Modal (VAT declaration model.version.3) and Latvian VAT declaration (VAT declaration (LV).version.3.2).
  5. Set up Effective from dates for both: the new format (3.2) and the previously used format.

Effective from dates parameter let system to determine in the run time which version of the format to be in use taking into account system date.

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Hotfix information

Prerequisites

You must have the following product installed to apply this hotfix:

  • Microsoft Dynamics 365 for Finance and Operations, Enterprise Edition

To update your system, the package with the following KB number should be downloaded from http://lcs.dynamics.com/ and installed: 

4077025

The whole list of KB numbers of prerequisites packages is provided in the related GER configurations.

Restart requirement

You must restart the Application Object Server (AOS) service after you apply the hotfix.

If you are encountering an issue downloading, installing this hotfix, or have other technical support questions, contact your partner or, if enrolled in a support plan directly with Microsoft, you can contact technical support for Microsoft Dynamics and create a new support request. To do this, visit the following Microsoft website:

https://mbs.microsoft.com/support/newstart.aspx

You can also contact technical support for Microsoft Dynamics by phone using these links for country specific phone numbers. To do this, visit one of the following Microsoft websites:

Partners

https://mbs.microsoft.com/partnersource/resources/support/supportinformation/Global+Support+Contacts

Customers

https://mbs.microsoft.com/customersource/northamerica/help/help/contactus

In special cases, charges that are ordinarily incurred for support calls may be canceled if a Technical Support Professional for Microsoft Dynamics and related products determines that a specific update will resolve your problem. The usual support costs will apply to any additional support questions and issues that do not qualify for the specific update in question.

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Note This is a "FAST PUBLISH" article created directly from within the Microsoft support organization. The information contained here in is provided as-is in response to emerging issues. As a result of the speed in making it available, the materials may include typographical errors and may be revised at any time without notice. See Terms of Use for other considerations.

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Keywords: kbexpertiseinter, kbexpertisebeginner, kbexpertiseadvance, kbmbsquickpub, kbsurveynew, kbmbspartner, kbnoloc, kbmbsmigrate, Latvian VAT declaration format, kbqfe

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Article Info
Article ID : 4077025
Revision : 6
Created on : 1/25/2018
Published on : 1/25/2018
Exists online : False
Views : 554