VAT & Tax Configuration
IMS 9.4.4 expands VAT from a simple sales setting into a complete workflow covering company VAT settings, purchase tax treatments, supplier VAT registration, purchase documents and VAT-aware sales/returns.
VAT configuration flow
| Step | IMS area | What is configured |
|---|---|---|
| 1 | System → Settings | Enable VAT, VAT Account No., Percentage and Round. |
| 2 | Financial → Integration Setup | Purchase VAT / Tax Codes: treatment type, rate, base/posting mode, recoverability, account references, effective dates and active state. |
| 3 | Manage → Suppliers | Whether the supplier is VAT Registered and the supplier VAT Account No. |
| 4 | Inventory → Purchases | Supplier tax document details, Tax Treatment, Taxable Amount, VAT Amount, Supplier Total and tax/customs references. |
| 5 | Sales / Transactions Expert | VAT Base, VAT %, VAT Amount and return VAT derived from the original sale. |
1. Enable VAT in System Settings
Open System → Settings, click Edit and use Transaction Settings.
| Setting | Purpose |
|---|---|
| Enable Value-Added Tax | Turns VAT processing on for the current company database. |
| Account No. | Company VAT account number stored with System Settings. IMS requires this value when VAT is enabled. |
| Percentage | VAT percentage displayed as a percent. A zero percentage results in VAT being saved as disabled. |
| Round | Sales VAT rounding increment. When greater than zero, IMS rounds the extracted VAT amount to the nearest configured increment using midpoint-away-from-zero rounding. |
2. Configure Purchase VAT / Tax Codes
Open Financial → Integration Setup. When VAT is enabled, the Purchase VAT / Tax Codes panel appears beside the normal financial connection/account mappings.
| Field | Purpose |
|---|---|
| Tax Code / Description | Unique code and user-facing description. Tax Code is fixed after creation. |
| Tax Type | DOMESTIC, ZERO, EXEMPT, IMPORT_PAID, IMPORT_DEFERRED, RCM or OUTSIDE_SCOPE. |
| Tax Rate % | 0–100 percentage. IMS stores the rate internally as a decimal and displays it as a percentage. |
| Base Mode | NET_INVOICE, MANUAL or NONE. MANUAL makes Taxable Amount and VAT Amount editable on a new Purchase document; non-manual modes are calculated from the Net Local amount. |
| Posting Mode | SUPPLIER, COUNTER, VAT_OUT or NONE. In the Purchase screen, SUPPLIER adds VAT to the displayed Supplier Total; the other modes leave Supplier Total at Net Local. |
| Recoverable % | 0–100 percentage used to split VAT into recoverable and non-recoverable amounts when the purchase tax record is saved. |
| Input Account / Counter Account | Optional account references stored with the tax code for the tax-posting configuration. |
| Effective From / To | Optional validity dates. Effective To cannot be earlier than Effective From. |
| Active | Only active tax codes are loaded into the Purchase Tax Treatment list. |
A new tax code starts with DOMESTIC, 10%, NET_INVOICE, SUPPLIER, 100% recoverable and Active selected. Adjust these values to the company's approved tax setup before saving.
Tax-type behavior in Purchases
| Tax Type | Current Purchase-screen behavior |
|---|---|
| DOMESTIC | Calculates VAT when the configured rate is greater than zero. A standard-rated domestic purchase requires the Supplier VAT Account No. |
| ZERO / EXEMPT / OUTSIDE_SCOPE | VAT Amount is calculated as zero by the automatic calculation path. |
| IMPORT_PAID / IMPORT_DEFERRED | Uses the configured rate/base rules and requires a Customs / Tax Reference No. before save. |
| RCM | Uses the configured rate/base rules; posting behavior is driven by the selected posting mode/account configuration. |
3. Maintain Supplier VAT information
When VAT is enabled, Manage → Suppliers shows a VAT Information section. Select VAT Registered for a registered supplier and enter its VAT Account No.. IMS will not save a VAT-registered supplier with a blank VAT Account No.
Purchases reads these fields when a supplier is selected. The current IMS 9.4.4 Bahrain defaults attempt to select BH_STD_10 for a VAT-registered supplier and BH_OUT_SCOPE for a non-registered supplier; if that code is not present, IMS selects the first active tax code.
4. Record VAT on Purchases
When VAT is enabled, the Purchase screen adds Supplier Invoice and VAT/tax fields. Tax values are saved with the purchase document so the selected tax treatment and calculated split are retained with the invoice.
| Field | Behavior |
|---|---|
| Supplier Invoice No. / Date | Required for all tax types except OUTSIDE_SCOPE. |
| Supplier VAT No. | Loaded from the Supplier master. Required for DOMESTIC when the tax rate is greater than zero. |
| Tax Treatment | Required active tax code. |
| Taxable Amount | Normally Net Local. Editable only for a MANUAL base-mode tax code on a new invoice. |
| VAT Amount | Automatically calculated as Taxable Amount × rate for taxable automatic modes and rounded to three decimal places; editable in MANUAL mode on a new invoice. |
| Supplier Total | Net Local plus VAT when Posting Mode is SUPPLIER; otherwise Net Local. |
| Tax Reference No. / Date | Reference information for tax/customs documentation. Reference No. is mandatory for IMPORT_PAID and IMPORT_DEFERRED. |
When the tax record is saved, IMS calculates the recoverable VAT portion from the tax code's Recoverable % and stores the remainder as non-recoverable VAT. Both values are rounded using the purchase-tax three-decimal calculation.
5. Sales VAT and returns
Sales VAT is inclusive: the receipt amount already includes VAT, and IMS separates it into VAT Base and VAT Amount using the configured VAT percentage. The Payment Details area shows VAT Base, VAT % and VAT Amount when VAT is enabled.
For a Return/Credit Return created from an original receipt, IMS uses the original invoice VAT context and previously returned amounts rather than blindly recalculating the return using today's VAT settings. This keeps partial and repeated returns aligned with the VAT that belonged to the original sale.