Enhanced Reverse Charge Mechanism Across Purchase Transactions

Reverse Charge Mechanism (RCM) support has been enhanced across key purchase transactions, providing a consistent approach to RCM processing, accounting, and tax reporting.

RCM is supported for:

  • Purchase Invoice (PINV)
  • Bill of Entry (BOE)
  • Bill Payables (BLP)
  • Purchase Return (PRT)

Why is this important?

With RCM, the applicable VAT is accounted for by the buyer instead of the supplier. This enhancement allows users to manage RCM consistently across different purchase transactions and ensures that the related accounting and tax reporting are handled correctly.

How does it work?

For eligible RCM transactions:

  • The applicable RCM Tax Group can be selected.
  • The Reverse Charge column will be enabled and set to Yes.
  • The system processes the applicable RCM tax based on the transaction.
  • The required RCM accounting entries are generated.
  • RCM transactions are included in the relevant Tax Filing and Tax Detailed Reports.
  • Purchase Returns are handled appropriately as RCM adjustments in the applicable reports.

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Tax Reporting

RCM transactions are reflected in the relevant tax reports for:

  • 🇸🇦 KSA Tax Filing & Tax Detailed Reports
  • 🇦🇪 UAE Tax Filing & Tax Detailed Reports
  • 🇧🇭 Bahrain Tax Filing & Tax Detailed Reports

This ensures RCM transactions are consistently reflected across Purchase Invoices, Bills of Entry, Bill Payables, and Purchase Returns.

Benefit

This enhancement provides consistent RCM processing and accounting across purchase transactions, improves VAT reporting accuracy, and makes it easier to manage and track RCM-related transactions.

To enable and avail this feature, please contact our Support Team.