What is a VAT code?
A VAT code is used to specify how an expense should be handled for VAT reporting purposes. The VAT code determines how the expense is treated when it is exported to your accounting system.
VAT codes are used by the accounting system to ensure that amounts are reported correctly for VAT purposes. It is therefore important to use the correct VAT code for each type of expense.
What is the difference between a VAT code and a VAT rate?
VAT codes and VAT rates serve different purposes:
VAT rate specifies the percentage of VAT, for example 25%, 12%, or 6%.
VAT code specifies how the expense should be handled for VAT reporting purposes.
When you use VAT codes in Nordea Business Card, you select the VAT code that should be included when the expense is exported to your accounting system. The VAT calculation itself is then handled according to the settings in your accounting system.
Which accounting systems support VAT codes?
VAT codes can be used with accounting integrations that support this feature.
For Nordea Business Card, VAT codes can be used with:
Microsoft Dynamics 365 Business Central (VAT codes).
Visma.net.
Set up VAT codes
VAT codes can be linked to your categories in Nordea Business Card.
Go to Accounting settings and configure the category with the VAT code you want to use.
When a card user selects that category for an expense, the predefined VAT code is included with the accounting information.
Examples of how VAT codes can be used
For example, you can:
Assign a specific VAT code to each category, so the correct code is automatically applied when a card user selects the category.
Create specific categories for purchases subject to reverse charge VAT, such as Purchases outside the EU, and assign the appropriate VAT code to the category.
This allows card users to select the appropriate category while the underlying accounting information is already configured.
Important to know
Do not change VAT codes if you are unsure which code should be used.
An incorrect VAT code may result in incorrect VAT reporting.
Check the VAT code when creating or changing a category before the category is used.
Contact your accountant or person responsible for accounting if you are unsure which VAT code to use.