We checked the VAT report in the ERPNext version 13. It is checking the emirates of customer/supplier and generating VAT report based on their location. Emirates wise classification is not on the basis of customer/supplier location. As per FTA, it is on the basis of fixed establishment(your location as supplier) related to the sale.
Company A has two fixed establishment. One is located in Dubai and the other in Sharjah.
If company A sells it’s products located in the fixed establishment in Sharjah to another company in Ajman/Abudhabi/Fujaira/dubai, then this sale will fall under Sharjah.
If company A sells it’s products located in the fixed establishment in Dubai to another company in Abu Dhabi/Sharjah/Ajman, then this sale will fall under Dubai
So the VAT should be calculated based on the emirate where the company is located. Or based on the emirates of the cost centers if we are treating branches as cost center. Or if you are defining any other accounting dimension, we will have to link the same.
For the time being, if the company is located only in one emirate, we can define the same as customers & suppliers emirate and we will get the report. But if there are two branches and if common customer or supplier is involved, we won’t get the report correctly.