Complete Feature Overview
All Three VAT Features & How They Work Together
Version: 1.0
Language: English
Date: February 2025
The Three Features Explained
The VAT Rate per Dimension app includes three complementary features for VAT management:
1. Dimension-Based VAT (Basic)
Works with G/L Accounts (tabel 15)
Uses Dimension matching to override VAT groups
Limited to G/L accounts
2. Location-Based VAT for Items (Advanced)
Works with Items, Resources, Charges (tabel 37+)
Uses Location Code to override VAT groups
Perfect for multi-location companies
3. Partner Type Classification (Supporting)
Automatic classification of customers (COMPANY vs PERSON)
Uses VAT Registration Number as indicator
Combined with Shipping Country for VAT Bus. Posting Group lookup
Feature Matrix
Feature | Works On | Triggers | Based On | Sets |
|---|---|---|---|---|
Dimension-Based | G/L Accounts | Dimensions | Dimension values | VAT Prod. Posting Group |
Location-Based | Items/Resources | Location Code | Location + Item default | VAT Prod. Posting Group |
Partner Type | Customers | Customer modify | VAT Reg. Number | Partner Type (COMPANY/PERSON) |
How They Work Together
The Complete Flow
┌─────────────────────────────────┐
│ CUSTOMER MASTER DATA │
├─────────────────────────────────┤
│ Name: ACME GmbH │
│ VAT Reg. No: DE123456789 ←─────────┐
│ Country: Germany │ │
│ Partner Type: COMPANY (auto) │◄────┘
│ │ Feature #3:
│ │ Partner Type
└────────────┬────────────────────┘ Classification
│
▼
┌─────────────────────────────────┐
│ CREATE SALES ORDER │
├─────────────────────────────────┤
│ Customer: ACME GmbH │
│ Ship-to: Germany │
└────────────┬────────────────────┘
│
▼
┌─────────────────────────────────┐
│ LOOK UP VAT BUS. POSTING GROUP │
├─────────────────────────────────┤
│ Using: │
│ • Shipping Country: Germany │
│ • Partner Type: COMPANY │
│ │
│ Find in mapping: │
│ (Germany, COMPANY) → │
│ → EU-INTRA │
│ │ Feature #3:
│ Result: EU-INTRA (0% VAT) │ Partner Type +
└────────────┬────────────────────┘ Country Lookup
│
▼
┌─────────────────────────────────┐
│ ADD SALES LINE │
├─────────────────────────────────┤
│ Item: LAPTOP-001 │
│ Quantity: 1 │
│ Location Code: DE-STORE ←────────┐
│ │ │
│ System detects changes and: │ │
│ • VAT Bus. Posting Group set │ │
│ • Look up VAT Prod. Posting │ │
│ Group for location │ │ Feature #2:
│ │ │ Location-Based VAT
│ Mapping: (DE-STORE, STANDARD) │ │ for Items
│ → B2B-INTRA-EU │◄────┘
│ │
│ Result: │
│ • VAT Prod. Posting Group: │
│ B2B-INTRA-EU │
│ • VAT Bus. Posting Group: │
│ EU-INTRA │
└────────────┬────────────────────┘
│
▼
┌─────────────────────────────────┐
│ CALCULATE VAT RATE │
├─────────────────────────────────┤
│ From VAT Posting Setup: │
│ │
│ (EU-INTRA, B2B-INTRA-EU) │
│ → VAT % = 0% │
│ │
│ Unit Price: 10,000 DKK │
│ Excl. VAT: 10,000 DKK │
│ VAT: 0 DKK │
│ Incl. VAT: 10,000 DKK │
└─────────────────────────────────┘
FINAL RESULT
All VAT determined automatically!
Feature #1: Dimension-Based VAT (G/L Accounts)
Use Case
When VAT depends on which dimension values are used on the line.
Example
Setup:
If Dimension "Department" = "Export"
Then use VAT group: EXPORT-VAT (0%)
Usage:
G/L Line with Dimension "Export"
→ System finds match
→ Sets VAT group = EXPORT-VAT
→ VAT % = 0%
Configuration
Enable: "Sales Lines" in Setup
Choose: "Managing Dimension" or "Whole Dimension Set"
Create dimension mappings in: "VAT Rate per Dim."
When to Use
G/L Account transactions with special VAT rules
Dimension-based business logic
Rare use case (most companies use Location-based instead)
Feature #2: Location-Based VAT (Items, Resources, Charges)
Use Case
When VAT depends on where items are shipped from (location code).
Example
Setup:
Location: DE-STORE → VAT Group: B2B-INTRA-EU (0%)
Location: DK-HQ → VAT Group: DK-DOMESTIC (25%)
Usage:
Item line with Location: DE-STORE
→ System finds mapping
→ Sets VAT group = B2B-INTRA-EU
→ VAT % = 0%
Configuration
Enable: "Advanced VAT for Sales"
Create mappings in: "VAT Rate Advanced Sales Product Posting Group"
Map: (Location, Item Default VAT) → Target VAT Group
When to Use
MOST COMMON feature
Multi-location companies
Different VAT treatment per warehouse
B2B vs. domestic sales
Primary recommendation for most companies
Feature #3: Partner Type Classification (Customers)
Use Case
When VAT depends on whether customer is a company (B2B) or person (B2C).
Example
Setup:
Mapping 1: (Germany, COMPANY) → EU-INTRA (0%)
Mapping 2: (Germany, PERSON) → CONSUMER-DE (19%)
Usage:
Customer "ACME GmbH" with VAT Reg. No. → Partner Type = COMPANY
→ Sales to Germany gets EU-INTRA (0% B2B)
Customer "John Smith" without VAT Reg. No. → Partner Type = PERSON
→ Sales to Germany gets CONSUMER-DE (19% consumer)
Configuration
Enable: "Automatic determine CustomerType"
System auto-fills based on VAT Reg. Number
Use in mappings: "VAT Adv Sales Bus Post Grp"
When to Use
B2B and B2C companies
Different VAT rates per country for business vs. consumer
Need to distinguish company vs. private customer
Recommended when you have both B2B and B2C sales
How They're Combined
Scenario 1: B2B Company, Multi-Location
Customer: ACME Corp (German B2B company)
→ Partner Type = COMPANY (auto)
→ Country = Germany
Sales Order:
Line 1: Item from DE-STORE
→ Feature #3: Partner Type = COMPANY
→ Feature #2: Location = DE-STORE
→ Result: EU-INTRA + B2B-INTRA-EU = 0% VAT ✓
Line 2: Item from DK-HQ
→ Feature #3: Partner Type = COMPANY
→ Feature #2: Location = DK-HQ
→ Result: DOMESTIC = 25% VAT ✓
All automatic! ✓
Scenario 2: B2C Consumer, Different Countries
Customer: Anna Mueller (German consumer)
→ Partner Type = PERSON (auto)
→ Country = Germany
Sales Order:
Line 1: Item shipped from Germany
→ Feature #3: Partner Type = PERSON
→ Feature #2: Location = DE (home location)
→ Result: CONSUMER-DE = 19% VAT ✓
Line 2: Item shipped from Denmark
→ Feature #3: Partner Type = PERSON
→ Feature #2: Location = DK
→ Result: CONSUMER-DK = 25% VAT ✓
System handles both lines correctly! ✓
Scenario 3: Mixed (G/L Accounts + Items)
Sales Order:
Line 10: G/L Account (Export account with dimension "EXPORT")
→ Feature #1: Dimension matching
→ VAT Prod. Group = EXPORT (0%)
Line 20: Item from DE-STORE
→ Feature #2: Location-based
→ VAT Prod. Group = B2B-INTRA-EU (0%)
Line 30: Expense allocation to DE-STORE
→ Feature #2: Location-based
→ VAT Prod. Group = B2B-INTRA-EU (0%)
Each feature handles its type! ✓
Configuration Priority
If multiple features are enabled:
1. Dimension-Based VAT (Feature #1)
↓ (If not matched, continue)
2. Location-Based VAT (Feature #2)
↓ (If not matched, continue)
3. Fallback to Item/Account default
In practice: Usually only Feature #2 is needed.
Common Configuration Examples
Example 1: Simple Multi-Location (Most Common)
Requirements:
Same VAT for all customers
Different VAT per location/warehouse
Setup:
Feature 1 (Dimension-Based): DISABLED
Feature 2 (Location-Based): ENABLED
Feature 3 (Partner Type): DISABLED
Mappings:
(DK-HQ, STANDARD) → DK-DOMESTIC
(DE-STORE, STANDARD) → B2B-INTRA-EU
(US-STORE, STANDARD) → US-EXPORT
Result: Simple, effective, all locations handled ✓
Example 2: B2B & B2C Differentiation
Requirements:
Different VAT for companies vs. consumers
Different per country
Different per location
Setup:
Feature 1 (Dimension-Based): DISABLED
Feature 2 (Location-Based): ENABLED
Feature 3 (Partner Type): ENABLED
Partner Type Mappings:
(Germany, COMPANY) → EU-INTRA
(Germany, PERSON) → CONSUMER-DE
(Denmark, COMPANY) → DOMESTIC
(Denmark, PERSON) → DOMESTIC
Location Mappings:
(DE-STORE, STANDARD) → B2B-INTRA-EU
(DK-HQ, STANDARD) → DK-DOMESTIC
(US-STORE, STANDARD) → US-EXPORT
Result: Full B2B/B2C handling + location handling ✓
Example 3: Complex Multi-Dimensional (Rare)
Requirements:
Some lines are G/L (dimension-based)
Some lines are Items (location-based)
Some customers B2B, some B2C
Setup:
Feature 1 (Dimension-Based): ENABLED
Feature 2 (Location-Based): ENABLED
Feature 3 (Partner Type): ENABLED
All mappings active
All dimensions configured
All locations configured
All partner types handled
Result: Complete flexibility, handles all cases ✓
Decision Tree - Which Features to Use
START
│
├─ Do you have multiple locations/warehouses?
│ └─ YES → Use Feature #2 (Location-Based)
│ └─ NO → Skip Feature #2
│
├─ Do you have both B2B and B2C customers?
│ └─ YES → Use Feature #3 (Partner Type)
│ └─ NO → Skip Feature #3
│
├─ Do you have dimension-based VAT on G/L accounts?
│ └─ YES → Use Feature #1 (Dimension-Based)
│ └─ NO → Skip Feature #1
│
└─ CONFIGURE BASED ON YOUR NEEDS
Setup Checklist - By Feature
If Using Feature #2 (Location-Based)
☐ Enable "Advanced VAT for Sales"
☐ Define all your locations
☐ Create location mappings
☐ Create VAT Posting Setup entries
☐ Test with sample orders
☐ Finance validation
☐ Train users to set Location Code
If Using Feature #3 (Partner Type)
☐ Enable "Automatic determine CustomerType"
☐ Ensure customers have VAT Reg. Numbers filled
☐ Create (Country, Partner Type) mappings
☐ Create VAT Posting Setup entries
☐ Test with B2B and B2C customers
☐ Finance validation
If Using Feature #1 (Dimension-Based)
☐ Enable "Sales Lines" or "Purchase Lines"
☐ Define which dimension to use
☐ Create dimension value mappings
☐ Create VAT Posting Setup entries
☐ Test with G/L lines
☐ Finance validation
Performance Impact
All three features have minimal performance impact:
Feature #1 (Dimension-Based):
- Indexed lookup on dimension set
- ~2-5ms per line
Feature #2 (Location-Based):
- Indexed lookup on location + date
- ~1-3ms per line
Feature #3 (Partner Type):
- Simple customer lookup
- ~0.5-1ms per customer
- No impact on lines (only on customer creation)
Total: Negligible impact on order processing speed.
Troubleshooting - Multi-Feature Scenarios
Problem: Wrong Feature Triggering
Scenario: Both Feature #1 and #2 enabled, but wrong one applies
Solution:
Priority:
1. Feature #1 (Dimension) checks first
2. Feature #2 (Location) checks if #1 doesn't match
If wrong feature:
- Disable the unwanted feature, or
- Remove the mapping from unwanted feature, or
- Restructure to avoid overlap
Problem: Conflicting Mappings
Scenario: Same item gets two different VAT groups from different features
Solution:
Resolve by:
1. Checking which feature should take priority
2. Removing mapping from lower-priority feature
3. Testing to confirm correct behavior
Best Practices - Using Multiple Features
DO
✓ Clearly document which feature handles what
✓ Test all scenarios before go-live
✓ Keep mappings organized and labeled
✓ Regularly audit for consistency
✓ Version control configuration changes
✓ Have single person responsible per feature
DON'T
✗ Enable all features if not needed (complexity)
✗ Have overlapping mappings (confusion)
✗ Use Feature #1 when Feature #2 would work better
✗ Ignore the priority order
✗ Make ad-hoc changes without testing
Feature Recommendations
For Most Companies
USE: Feature #2 (Location-Based VAT)
REASON:
- Simplest to configure
- Works on all item types
- Handles 90% of use cases
- Easy to maintain
Add Feature #3 If
USE: Feature #3 (Partner Type)
REASON:
- You have B2B and B2C customers
- Different countries have consumer vs. business rates
- You want automatic classification
Only If Special Case
USE: Feature #1 (Dimension-Based)
REASON:
- You have complex G/L dimension-based VAT
- Rare case, most use Location-Based instead
Training by Feature
Training: Feature #2 (Most Important)
For all users:
How to set Location Code
What it does (auto-applies VAT)
What to check before posting
For finance:
How mappings work
How to audit VAT entries
How to update mappings
Training: Feature #3
For all users:
How to fill VAT Reg. Number
Why Partner Type matters
What different rates mean
For finance:
Mapping logic (Country + Partner Type)
Different rates per type
Validation procedures
Training: Feature #1
Usually not needed (rarely used), but if needed:
Only G/L account users
How dimension affects VAT
Which dimensions trigger overrides
Summary Table
Feature | What | When | Who Uses | Complexity |
|---|---|---|---|---|
#1 Dimension | G/L dimension values | Rare cases | G/L accountants | High |
#2 Location | Location code | ALWAYS | All users | Low |
#3 Partner Type | Customer B2B/B2C | If B2B+B2C | All users | Medium |
Quick Start - All Features Combined
Step 1: Choose Features You Need
Location-Based? → YES (recommend for all)
Partner Type? → Only if B2B and B2C
Dimension-Based? → Only if special case
Step 2: Configure Selected Features
Enable toggles in Setup
Create mappings
Create VAT Posting Setup entries
Step 3: Test Each Feature
Test Feature #2 with sample orders
Test Feature #3 with B2B and B2C customers
Test Feature #1 if using G/L accounts
Step 4: Train Users
Focus on Feature #2 (most important)
Explain Partner Type if using Feature #3
Mention Feature #1 only if relevant
Step 5: Go Live
Monitor first week
Adjust any issues
Finalize training materials
Additional Resources
For Details on Each Feature:
Feature #1: See Dimension-Based VAT documentation
Feature #2: See Location-Based VAT for Items documentation
Feature #3: See Partner Type Feature documentation
For Setup:
See Administrator Setup Guide
For Training:
See Training & Rollout Guide
For User Reference:
See User Guide English
Conclusion
The three VAT features work together to provide complete, flexible VAT management:
Feature #1: Handles complex dimension-based rules (rare)
Feature #2: Handles location-based rules (common - RECOMMENDED)
Feature #3: Handles B2B/B2C classification (common if applicable)
Recommendation: Most companies use Features #2 and #3 together.
Last Updated: February 2025
Version: 1.0