- Pro rata VAT processing allows for calculation, processing, and reporting of VAT for companies with tax deductible and tax-exempt sales
- Companies with mixed operations can deduct only part of the input VAT they pay for acquisitions
- The deductible amount is determined by applying a pro rata coefficient to the relevant VAT rate
- Time-dependent taxes must be activated for calculating pro rata VAT
- Pro rata VAT covers deductible and non-deductible parts of input tax in one calendar year
- Configuring pro rata VAT calculation involves defining tax codes and coefficients and setting up account determination
- Year-end adjustment of pro rata VAT may be necessary using the final pro rata coefficient
- When creating and posting an incoming invoice with a tax code with activated pro rata split, the system automatically splits the input VAT
- Pro rata VAT postings are adjusted at the end of the calendar year using the final pro rata coefficient.
Source: help.sap.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
