#value_added_tax
How to account for value added tax
How is the accounting of 9% value added tax recorded in the books?
Also, what is the “account title” that should be created in this regard in other accounts and receivable documents?
1- Purchase of materials in the amount of 1,000,000 Rials:
Purchase 1,000,000
Purchase value added tax 60,000
Purchase fees 30,000
Creditors 1,090,000
2- Sales of manufactured products in the amount of 1,500,000 Rials:
Debtors 1,635,000
Sales value added tax 90,000
Sales tax 45,000
Selling 1,500,000
Assume that the tax period of the first quarter of the hypothetical company is summarized in these two operations:
Clearance of sales value added tax and purchase value added tax = 60,000 – 90,000 = 30,000 rials
Clearance of sales duties and purchase duties = 30,000 – 45,000 = 15,000 rials
Total payable debt for the period is 45,000 rials
If you have purchased but not sold during the mentioned period, the total amount paid for taxes and purchase duties can be refunded as claims from the Tax Administration.
If you have not purchased during the mentioned period and only sales have been made, the total amount received for taxes and sales duties must be paid as a debt to the tax affairs organization.
In this system, we must define 4 penal headings:
1- Purchase value added tax account
2- Sales value added tax account
3- Purchase duty account
4 – Sales tax account
All duties and value added taxes paid according to purchase invoices must be debited in accounts 1 and 3.
All duties and value added tax received according to sales invoices should be credited in accounts 2 and 4.
If the difference and settlement at the end of the period of these 4 accounts involves an overpayment, you should request the refund of the funds from the property.
If the difference and settlement at the end of the period of these 4 accounts involves a payment deduction, we must pay the related funds to the assets.
All the funds related to VAT in the case of sales refunds are referred to the sales VAT account and in the case of purchase refunds to the purchase VAT account.
Of course, regarding the related complications, it is done in the same way recently.
– In what general or specific account should these accounts be created? (i.e. advance payment? deposit? or….?) purchase and sales tax account)
1- Accounts and payable documents
Other accounts and payable documents
Tax Affairs Organization
Duties and sales value added taxes
2-Accounts and documents receivable
Other accounts and receivable documents
Tax Affairs Organization
Purchase duties and value added taxes
2- If we make a purchase and the purchased item is used in one of the company’s projects, how will it be registered in the project?
What is the problem for paying taxes? (How much?)
The total price of your purchase (not including value added tax) will be registered to the project account and after the project is ready to be handed over, according to the invoice issued by you, including 9% value added tax and sales charges, it will be collected from your account, and after the value added account and purchase charges are settled, the difference will be applied.
This post is written by se1445