Cross Regime Intercompany transaction - VAT Tax

Summary:

Intercompany VAT behaviour on generated AR and AP Invoice

Content (please ensure you mask any confidential information):

Can you please share any document to clarify how VAT is applied on generated AP and AR Invoices from Intercompany module?

As per our understanding, if the regime is same, then system will copy AR tax code to AP tax code, provided that tax code is valid and available for AP invoices. It will not check the tax rules for P2P cycle whereas if the regime is different, tax rate code will not be copied to the AP Invoice from AR Invoice and the tax is applied on the AP Invoice as per the tax rules configured for P2P cycle. (Note: in both the cases i.e. same regime or different regime, tax on AR Invoice will be as per the tax