In Yokoy, invoice tax rates (VAT rates) are assigned per invoice line item.
There are two ways of assigning a tax rate per line item:
during invoice upload based on AI extracted data
manually by the user once the invoice has been uploaded.
Invoice dates are validated against the applicable tax rate validity. Notification(s) are triggered where the invoice date does not fall within the validity period for the assigned tax rate. Notifications can be dismissed and appear in the history for the invoice.
Assigning the invoice tax rate when uploading an invoice
When an invoice is uploaded, Yokoy applies this logic:
Yokoy sends a list of all active tax rate percentages for the corresponding company to Yokoy AI.
Based on the list of active tax rate percentages and the extracted invoice data, Yokoy AI predicts the most probable tax percentage per line item and returns it to the invoice module.
Yokoy then checks if the returned percentage exists in the list of active tax rates set up for the country of origin of the invoice.
If no matching tax rate is found, then no tax rate is assigned to the line item.
If a matching tax rate is found, then Yokoy validates and assigns the tax rate depending on whether an invoice issue date is extracted.
If an invoice date is not extracted, the matching tax rate is assigned to the line item. No notification message is triggered.
Tax rate setup for a country where the percentage is specified in the Tax rate field
Validating and assigning tax rates
If a matching tax rate is found, Yokoy performs a check on the invoice date or service dates to see they fall within the validity period of the detected tax rate.
If an invoice issue date is extracted, it is verified against the validity dates of the matching tax rate.
If the extracted invoice date is within the validity period, then the tax rate is assigned to the line item.
If the extracted invoice date is not within the validity period of the matching tax rate, then the tax rate is assigned to the line item and a notification message is displayed to the user that the invoice date is not within the validity period of the selected tax rate.
Tax rate notification at line item level
The notification is shown per tax rate. If multiple tax rates are assigned to the same invoice and two or more of them don’t pass the invoice date validation, then multiple messages are displayed in the line items header. This notification is dismissible by default. However, it can be changed in the business rule settings.
Notification message(s) can be dismissed by the configured user roles by clicking Dismiss. This action creates a record in the invoice history log. If a notification has been dismissed, it no longer appears for that invoice, regardless the invoice status or any actions performed to update invoice data.
A notification can be dismissed for any invoice status. If a notification is not dismissed, then it continues to appear in the invoice line items even after the invoice is transitioned to another workflow state.
Tax rate notification dismissed by user
✏️ Note
The dismiss action appears in the History tab only after an invoice is saved or transitioned to another document status.
Validating the tax rate when updating an invoice field
When a user updates manually certain invoice data fields, Yokoy applies a specific logic.
The Tax % dropdown list in the line items displays all active VAT rates configured for the company, independent of their assigned country.
If the issue date is updated, then tax rate validation is re-triggered and notification(s) for any tax rates that fail invoice date validation are displayed.
If a tax rate is updated in a line item, then tax rate validation is re-triggered and notification(s) for any tax rates that fail invoice date validation are displayed.
If service date is added to the invoice header, then tax rate validation is performed based on invoice service date rather than issue date.
If service date is within the validity period of the VAT rate, then no notification message is displayed to the user.
If service date is outside of the validity period of the VAT rate, a notification is displayed to the user. The notification message(s) can be dismissed.
If the service date is removed from the invoice header, then tax rate validation is re-triggered based on issue date, if available.
If a service period is selected in the invoice header instead of a service date, then tax rate validation is performed based on the service period selected. Both the service start and end date need to fall within the validity period of the tax rate. If any of the dates is outside of the service period, then a notification is triggered for the user.
If a tax rate is not used anymore, it needs to be deactivated manually in the tax rates setup.
❗️ Warning
Deactivated tax rates cannot be manually selected in the invoice line items or used in AI extraction.