Account for EC Sales, EC Acquisitions and Reverse Charges in Xero

If you trade with customers or suppliers in other EC countries, you can use Xero's tax rates to assign transactions to the correct box in your VAT Return.

EC Sales

If you sell goods or services to other EC countries, use tax rates with the tax type EC Sales Goods or EC Sales Services. Xero will assign these sales to your VAT Return and EC Sales List report.

EC Acquisitions

If you buy goods from other EC countries, use tax rates with the tax type EC Acquisitions when entering your bill. Xero will assign these transactions to the correct boxes in your VAT Return.

If you use the EC Acquisitions (20%) tax rate for purchases, Xero will include them in the EC Acquisitions section of the VAT Return and add an offsetting item to the EC Acquisitions (20%) Reclaimed VAT section of the return.

Reverse Charges

If you purchase services from suppliers in other EC countries, you may have to account for the VAT yourself using the 'reverse charge' procedure. In Xero, use tax rates with the tax type Reverse Charges when entering your bill. Xero will assign these transactions to the correct boxes in your VAT Return.

If you use the Reverse Charge (20%) tax rate on a bill, Xero will include it in the Reverse Charge section of the VAT Return and will add an offsetting item in the Reverse Charges (20%) Reclaimed VAT section of the return.

Zero rated services

You may have a zero rated service which is reverse charged. In Xero, create a tax rate at 0% with the Reverse Charges tax type. Transactions with this tax type are assigned to boxes 6 and 7 of your VAT Return.