Step 1: Accessing the VAT Free Reason Configuration

Let’s begin by opening Swiftly Workspace.

From the homepage:

• Click on Configuration

• Then select Master Data Management

A new window will appear.

Scroll to the ITEMS section and click on VAT Free Reason.

This is where you define the valid reasons for applying a 0% VAT rate on customer or supplier transactions.

Step 2: Understanding the Purpose

VAT Free Reasons are required when a transaction is exempt from tax but still recorded in your system — typically when using a 0% VAT rate.

They are used to:

• Clearly explain why VAT was not applied

• Meet local tax authority documentation requirements

• Improve traceability and audit readiness

• Automatically populate forms or reports with consistent exemption data

VAT Free Reasons are especially important for international sales, non-profits, and specific tax-exempt goods or services.

Step 3: Creating a VAT Free Reason

To create a new VAT Free Reason:

1. Click the “+” button in the top-right corner

2. Enter a clear, descriptive name for the reason (e.g., Intra-community Supply, Export Outside EU, Medical Services)

3. Toggle the Active switch to ON if the reason should be available in the system

Only active VAT Free Reasons will be available for selection when assigning 0% VAT rates to transactions.

Step 4: Example Setup

Let’s create a VAT Free Reason for Export Outside EU:

• Name: Export Outside EU

• Active: ON

This reason can be used in cases where goods are sold to a country outside the European Union, and VAT is not applicable.

Click Save to add the reason to your list.

Step 5: Editing or Deactivating a VAT Free Reason

To make changes:

• Click on the name of the VAT Free Reason

• From here, you can:

  • Update the name

  • Toggle Active on or off

You might deactivate a reason if it is no longer recognized by tax authorities or if your business process changes.

Click Save or Save & Close to apply changes.

You’ve now successfully:

• Accessed the VAT Free Reason module

• Created and activated a reason for tax-exempt transactions

• Edited and managed your list of VAT exemption justifications