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Overview

VAT and VAT Settlement

What is VAT, and how is it managed in Xena?

What is VAT?

VAT (value added tax) is an indirect tax levied on goods and services when they are sold to consumers. VAT is paid by consumers, but it is businesses that collect the amount and subsequently settle it with the Tax Authority.

VAT-registered businesses can deduct the VAT they pay on business purchases (input VAT) from the VAT they charge customers (output VAT). This is called VAT deduction and ensures that VAT is only paid on the business's added value.

To avoid fines or penalties, it is important to comply with the applicable VAT rules. For precise guidance, it is recommended to consult an accountant or contact the Tax Authority.

 

VAT reconciliation

Before settling VAT, you can perform a VAT reconciliation to ensure that posted amounts match the expected ones. Any discrepancies should be investigated.

➡️ Read about how to check the amounts on the VAT settlement

 

Via ledger report

  1. Go to Ledger > Ledger reports, and select the VAT reconciliation tab.

  2. Enter the desired period.

  3. Expand the VAT codes to see the expected and posted VAT amount per ledger account.

  4. Print the report to get a detailed overview of amounts and any discrepancies.

Use the VAT reconciliation report in Xena

 

Via VAT code

  1. Open a VAT code by clicking on the code in the report above.

  2. Select the Reconciliation tab.

  3. Enter the period.

  4. View a summary of VAT amounts for each account.

VAT reconciliation via the VAT code in Xena

 

Create a ledger account for manual VAT

In Xena, VAT codes and rates are flexible and can be changed. If you want to post manual VAT, you must first create a separate ledger account.

  1. Go to Ledger > Account overview > Account overview.

  2. Select Liabilities at the top and expand the VAT payable group.

  3. Click Create.

  4. Enter an account number and description (leave the VAT code field empty).

  5. Select a relevant Tax type (required for transfer to the Tax Authority).

  6. The account can now be used in the ledger entry for manual VAT postings.

Creating a ledger account for posting manual VAT in Xena

 

Post VAT settlement

  1. Go to Ledger > Vat > Vat settlement, and select the Settle VAT tab.

  2. Enter the period to be settled.

  3. Check the payment date (can be edited later).

  4. Verify the displayed VAT figures.

  5. Click Settle VAT to create postings and print the report.

⚠️ Note: Always recalculate primo postings before settling VAT!

The system posts the VAT settlement per VAT code, while the total sum is posted to the VAT payable account.

Posting a VAT settlement in Xena

 

After VAT settlement

  • Remember to report the VAT settlement to the Tax Authority

  • Lock the period you have settled to avoid further VAT postings in the period.

  • Reopen the period if you cancel a previous VAT settlement.

➡️ Read more about accounting periods

 

Report VAT settlement to the Danish Tax Authority

If you want to report VAT settlements electronically to the Danish Tax Authority directly from Xena, you must grant Xena permission to report via the NemVirksomhed solution through your profile on TastSelv Erhverv.

➡️ Follow this guide

 

Select tax types on accounts

If you have created ledger accounts in the VAT payable group, you must select a tax type for each of these accounts if you want to send VAT settlements directly to the Tax Authority.

  1. Open the menu Ledger > Account overview > Account overview

  2. Select the Liabilities group

  3. Expand the VAT payable group

  4. Find the account and select Go to ledger account.

  5. Click the edit icon and select the relevant Tax type.

⚠️ Note: The default VAT payable account has no menu and cannot be changed. Skip this one.

Select tax type on accounts in the VAT payable group in Xena

 

Transfer to the Danish Tax Authority

Once you have completed the above preparations, you are ready to send your posted VAT settlement to the Tax Authority.

  1. Find the posted VAT settlement under the Vat settlements tab.

  2. Open the menu (3 dots) → select Send draft to SKAT.

  3. The report is complete when you see code 5001 in the comment.

  4. Log in to TastSelv Erhverv and approve the figures.

Send a VAT settlement to the Tax Authority from Xena

If you get error 4801, you have most likely not yet activated Xena with the Tax Authority. Follow the guide as described above and try again.

Error when settling VAT with the Tax Authority in Xena

 

Reprint or cancel settlement

You can find all previous VAT settlements on the posted voucher:

  1. Go to Ledger > Vat > Vat settlement.

  2. Select the Vat settlements tab.

  3. Here you can reprint or cancel a settlement.

⚠️ Note: Settlements must be cancelled in chronological order (newest first).

The list specification of VAT-exempt EU sales can be found under the EU sales without VAT tab.

Reprint or cancel a posted VAT settlement in Xena

 

Pay VAT settlement

When the VAT payment falls due, either by making a payment to the Tax Authority or when the Tax Authority has deposited money into your account, you post the VAT as paid as described here:

  1. Go to Ledger > Vat > Vat settlement, and select the Vat settlements tab.

  2. Click Pay settlement for the relevant entry.

  3. Enter the payment date and payment account.

  4. Click Settle VAT to post the payment.

The payment is automatically offset against VAT payable, which is thereby reset to zero.

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