Member states of Gulf Cooperation Council (GCC) are set to introduce Value Added Tax (VAT) from January 1, 2018.
Businesses in some of these countries are scheduled to implement the new tax system and start charging VAT on selected items starting from January 1, 2018.

To enable VAT in Zenoti:

  1. Create tax groups and assign them to your business offerings
    Starting January 1, 2018, a standard VAT of 5% will apply to selected goods and services unless a zero rate or exemption applies.
    You must evaluate your business offerings (services, products, gift cards, packages, and memberships) with a tax consultant and make a note of the tax rate (0 or 5%) that each of your business offerings fall into.  
    As the first step, in Zenoti, you must create tax groups for the tax rates you identified and assign each of your business offerings to these tax groups.
    Learn how to create a tax group and assign it to your business offerings.
  2. Assign tax groups to your services and products
    After you have created tax groups, proceed to assign an appropriate tax group to each of your services and products.
    Learn how to assign a tax group.
    Important:
    You must make changes to the tax groups only on the night of 31st December, not before. If you make changes before 31st December, you will be charging your guests VAT even before it comes into effect.

    Review the list of VAT FAQ to understand your options when guests want to avail services that are either fully or partially paid for and were purchased before you transitioned to VAT.
  3. Assign a tax group to your gift cards
    Decide if you will sell your gift cards with or without tax.
    Learn how to set up gift cards without tax and gift cards with tax.

    Gift cards without tax:
    If you sell gift cards without tax, guests purchase a gift card for a specific price. The amount the guest pays for the gift card becomes the gift card balance that a recipient can use to partially or fully pay for a purchase inclusive of VAT.
    Example: If a guest purchases a gift card for $100, the guest can redeem the gift card for any purchase worth $100 (inclusive of VAT).
    If the gift card amount is lower than the total invoice amount, then the recipient can pay the difference using other payment methods (cash/card/check).

    Gift cards with tax:
    If you sell gift cards with tax, Zenoti automatically calculates the VAT on the amount the guest wishes to pay for the gift card and adjusts the value. The amount after deducting the VAT becomes the gift card balance that a recipient can use to partially or fully pay for a purchase.
    Example: If a guest wants to purchase a $100 gift card and the VAT is charged at 5%, the guest pays $105 and receives a gift card of value $100.
    To sell gift cards with tax, you must assign the tax group associated to your gift cards.
    Learn how to assign a tax group.
    Important:
    You must make changes to the tax groups only on the night of 31st December, not before. If you make changes before 31st December, you will be charging your guests VAT even before it comes into effect.

    Review the list of VAT FAQ to understand your options when guests want to redeem gift cards that were purchased before you transitioned to VAT.
  4. Assign tax groups to your packages
    Assign an appropriate tax group to each of your packages.
    Learn how to assign a tax group.
    Note:
    If you sell packages with services or products that contain items that do not attract VAT, speak to your tax consultant and finalize the tax rate group to apply to the packages.
    Important:
    You must make changes to the tax groups only on the night of 31st December, not before. If you make changes before 31st December, you will be charging your guests VAT even before it comes into effect.

    Review the list of VAT FAQ to understand your options when guests want to redeem packages that are either fully or partially paid and were purchased before you transitioned to VAT.
  5. Assign a tax group to your memberships
    Assign a tax group to your memberships.
    Learn how to assign a tax group.
    Note:
    If you sell memberships with services that that do not attract VAT, speak to your tax consultant and finalize the tax rate group to apply to the memberships.
    Important:
    You must make changes to the tax groups only on the night of 31st December, not before. If you make changes before 31st December, you will be charging your guests VAT even before it comes into effect.

    Review the list of VAT FAQ to understand your options when guests want to redeem memberships that are either fully or partially paid and were purchased before you transitioned to VAT.
  6. Review your loyalty points accrual and redemption settings
    In Zenoti, you can award loyalty points either on the pre-tax or the post-tax amount paid by a guest.

    Loyalty points on pre-tax:
    If you award and redeem loyalty points on the pre-tax amount after VAT is implemented, guests can use the accrued points (that were accrued before VAT was implemented or newly accrued) to pay for services or products and not the VAT amount.
    Example: The cost of hair serum is $105, where the item price is $100 and the VAT is $5. If a guest has $200 worth of loyalty points, the guest can only redeem $100 worth of loyalty points on the hair serum. The guest has to pay the $5 VAT using other payment methods (cash/card/check).

    Loyalty points on post-tax:
    If you award and redeem loyalty points on the post-tax amount after VAT is implemented, guests can use the accrued points to pay for services or products and also the associated VAT amount.  
    Example: The cost of hair serum is $105, where the item price is $100 and the VAT is $5. If a guest has $200 worth of loyalty points, the guest can redeem $105 worth of loyalty points on the hair serum.

    To understand the implications of awarding points on the pre-tax or the post-tax amount, see Points Accrual: Pre-Tax and Post-Tax.
    To know how you can specify if the points must be accrued or redeemed on the pre-tax or the post-tax amount, see:
    - Regular Loyalty Program: Configuring a Regular Loyalty Program
    - Tiered Loyalty Program: Configuring a Tiered Loyalty Program (Consider only  
       Closed Invoices section)


    If you decide to award points on the post-tax amount, see the VAT FAQ to understand the effect on the points that a guest accrued before VAT is implemented. 
  7. Configure center-specific product and vendor assignment
    Your vendors are likely to charge VAT for the products they sell to you.
    To capture the VAT details, you must configure each of your centers to have their own product-vendor association pricing, discount, and tax information that is same or different from other centers.
    Learn how to assign products to vendors.
  8. Associate tax for inventory transfer orders
    In a multi-center setup, you may require to transfer products between centers to cater to demands and shortages of products. In such situations, you create a transfer order between centers.
    You must review if your products are assigned to the appropriate tax group during transfers.
    Learn how to assign a tax group.  
    Important:
    You must make changes to the tax groups only on the night of 31st December, not before. If you make changes before 31st December, you will be charging your guests VAT even before it comes into effect.
    Review the list of VAT FAQ to understand your options if your purchase or transfer orders are not in delivered status before VAT comes into effect.
  9. Add VAT registration number for each center
    Under VAT, all registered business are assigned a unique registration number. You must enter this number in each of your centers.
    Learn how to enter the VAT registration number for a center.
    To print the VAT registration number in receipts, see the next step.
  10. Configure receipts to include VAT details
    You can configure your receipts to automatically include VAT registration number and registered business address in the receipt header, and also show the break down of tax components while printing or emailing receipts from the Point of Sale (POS) window.
    Learn how to:
    a. Show the breakdown of tax components in the receipts.
    b. Include VAT registration number and address in the receipt.
  11. Reports to reconcile VAT amount
    Zenoti has a number of Sales and Collection reports that have a Tax column that shows the VAT amount charged for an item.
    The following are some of the reports that you can use to reconcile VAT:
    - Collections by Item
    - Collections by Invoices
    - Sales - Service
    - Sales - Product
    - Sales -Package
    - Sales - Membership
    - Sales - Gift Card

    The following image shows the Tax column in one of the Sales reports:

       Note: In case you need help with specific details regarding VAT in reports, contact
       us at support@zenoti.com.

   12. Verify the tax rates in your accounting software
         If you use an accounting software such as, Xero or QuickBooks; for accurate
         bookkeeping, ensure that the tax rate or tax group for all your business offerings
         in Zenoti and your accounting software is the same.      
         Learn how to:
         - Verify tax rates in Xero
         - Verify tax rates in QuickBooks
        Note: If you are using any other accounting software and use Zenoti APIs, please
        be advised that Zenoti APIs have a tax field that you can specify VAT in.

   13. Pre and post VAT transactions
         Review the list of VAT FAQ and understand how you could handle transactions
         pre and post-VAT implementation.

         Note:
In case you need help configuring VAT, contact us at VatHelp@zenoti.com.

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