SAP Business One supports VAT payment, collection and reporting, in each localization according to the legal requirements of every country.

Enables companies to define VAT liability in the business partner and the item level.  

SAP Business One supports working method, by which the VAT is automatically calculated in manual journal entries (including those that created through recurring postings, postings templates and journal vouchers) and service documents.

This method is based on linking default VAT groups to G/L accounts, so when a transaction is created SAP Business One automatically calculates the VAT, according to the VAT group linked to the accounts involved in the transaction.  SAP Business One provides some pre-defined VAT groups (according to the selected localization) and the user can modify them or add more VAT groups as needed. Any change that is being submitted to the VAT group details is automatically recorded to a change log.

SAP Business One supports performance of VAT correction for A/P and A/R credit memos when required.

SAP Business One also provides justification note report (in Portugal only)  which lists the credit memos created for VAT correction purposes.

SAP Business One supports the withholding tax legal requirements in each localization:

Withholding Tax (Europe, Mexico & Chile, Australia & New Zealand, South Africa) - Enables the user to define withholding tax codes and to specify whether a vendor is subject to withholding tax. Any change that is being submitted to the withholding tax code details is automatically recorded to a change log. SAP Business One calculates automatically the withholding tax amounts in payment documents according to pre-defined parameters. Each localization is provided with pre-defined country-specific withholding tax codes, and a withholding tax report which supports the country's legal requirements.

1099/1096  (USA) - Supports the 1099/1096  Forms that are used to send details of income, paid to individuals or entities that are not employees. Enables companies to link the required form type and appropriate 1099 box to each vendor. SAP Business One automatically calculates the appropriate amounts, that later are reported through the 1099 and 1096 reports. Special print layout is provided to support printing on official pre-printed forms.

Withholding Tax (Israel) - Enables companies to indicate whether a vendor is subject to withholding tax, and to define for each subject vendor the appropriate percentage of withholding tax. SAP Business One calculates automatically the withholding tax amounts and creates the relevant journal transactions through the outgoing payments. In addition, a report which is designed to meet the country's legal requirements is provided.  

SAP Business One supports the legal requirements in Portugal for stamp tax. The stamp tax is applied as a fixed amount on specific documents (for example, checks, private contracts, public notarial documents, public services documents) and as a varying amount on operations (for example, credits, credit interests, bill of exchange, rental contracts). SAP Business One handles both scenarios, and provides the required report for this tax.  

Supports tax exemptions. For export transactions, companies can be exempted from paying value-added tax (VAT) if there is a declaration made in the form of a tax exemption letter that is sent to their business partners.

If a company issues a tax exemption letter to its vendors, during the validity period the vendors will invoice the company without VAT. If a company receives a tax exemption letter from its customers the company will invoice these customers without VAT.

In some business cases, such as when the company gives/receives free samples, or air lines customers are granted free ticket in exchanges of traveler miles, the goods/services are given/received free of charge, but the tax amounts derived from such transactions still have to be paid and reported. For this purpose, SAP Business One supports the creation of sales and purchasing documents for tax amounts only.

This option is not available in Israel.