What is captive VAT in SAP FI - Financial Accounting?

SAP Term: captive VAT

• Component: FI

• Component Name: Financial Accounting

• Description: A reverse-charge scenario in Angola where VAT is partly or fully withheld by the customer, who then pays the tax to the relevant government authority instead of paying it to the supplier. As defined by law, only certain types of companies, such as banks, insurance companies, state-owned companies, and oil and telecommunication enterprises are entitled to withhold captive VAT.

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• Key Concepts: 
  Captive VAT is a type of Value Added Tax (VAT) that is collected by a company on behalf of the government. It is typically used when a company sells goods or services to customers in another country, and the company is responsible for collecting and remitting the VAT to the government. In SAP Financial Accounting (FI), captive VAT is managed through the use of tax codes and tax rates. 
  
  How to use it: 
  In SAP FI, companies can set up tax codes for each type of captive VAT they need to collect. The tax codes are then assigned to the relevant customer accounts, and the tax rate associated with each code is used to calculate the amount of VAT due. The amount of VAT collected can then be reported to the government in accordance with local regulations. 
  
  Tips & Tricks: 
  When setting up tax codes for captive VAT, it is important to ensure that the correct tax rate is applied. This can be done by checking the local regulations for each country where the company operates, as well as any applicable international agreements. 
  
  Related Information: 
  For more information on how to set up and manage captive VAT in SAP FI, please refer to the official SAP documentation. Additionally, there are many online resources available that provide detailed guidance on how to configure and use captive VAT in SAP FI.