VAT postings - is it that difficult

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

Value added tax is a serious article for an accountant working on the main taxation regime. Perhaps only two taxes cause a huge amount of tax disputes - income tax and VAT. If land, transport, excises, tax for the use of subsoil must be paid by enterprises operating in certain types of activities or owning certain types of property, then these two taxes - profit and VAT - must be paid by all commercial organizations on the OSNO, regardless of the form property, existing property or type of activity. All accounting entries for accounting for the accrual and reimbursement of VAT are one of the most important and sometimes time-consuming duties of an accountant on an independent balance sheet. It is very common for large organizations to hire a separate staff member to handle these operations.

In what cases we charge VAT

Let's consider the most common cases when there is a need to charge VAT for payment to the budget:

• sale of goods, work,services;
• receipt of an advance from the customer;
• VAT recovery in connection with the sale of a previously acquired fixed asset (regardless of whether it was depreciated or not);
• VAT accrual on the cost of construction work performed on our own.

And now we will consider each case separately and immediately indicate what VAT transactions will be in this or that case. I will not give sub-accounts for some accounts, because they may be different for different enterprises.

Sales of goods, works, services

Any commercial enterprise uses this operation in its activities, because without the implementation of works, services or goods, it is impossible to get the most important result of activity - profit. VAT transactions for sale will be as follows:

• D62 - K90.01 - sold a product, work, service;
• D90 - K68.02 - VAT was charged to the budget. It is calculated by multiplying the realization amount by 18%.

Advance receipt from customer

As you know, upon receipt of funds before the date of the provision of any services, performance of various works or sale of goods, the seller must charge from the received advance the amount of VAT due to the deduction to the budget. In this case, the postings should be as follows:

• D51 or 50.01 - K62 - money was received from the customer to the current account;
• D76AB - K68.02 - VAT has been charged to the budget from the advance payment. It is considered in this case according to the formula 18% / 118%. That is, the amount of the advance must be multiplied by 18 and divided by 118, or vice versa -divide first, then multiply.

VAT recovery in connection with the sale of a previously acquired fixed asset (regardless of whether it was depreciated or not)

According to Part 2 of the Tax Code of the Russian Federation, the sale of a previously purchased fixed asset is considered income subject to VAT. Moreover, in this case, VAT recovery should be done both by enterprises in the general mode and in the simplified taxation system in the "income minus expenses" mode. After all, they, too, once, when acquiring a fixed asset on the basis of an invoice issued by the seller, accepted this VAT as an expense that reduces the taxable base for a single tax. VAT accounting entries are as follows:

• D91.02 - K01 - the operation of writing off the fixed asset at its original cost is reflected;
• D02 - K91.01 - the amount of depreciation accrued on this fixed asset has been written off;
• D76 - K91.01 - accrued proceeds from the sale of fixed assets;
• D91 - K68.02 - VAT has been charged for payment to the budget.

VAT accrual on the cost of self-made construction work

When carrying out construction work for their own needs on their own (the so-called economic method), enterprises are required to charge VAT on the entire cost of construction and installation work. The tax is charged at the rate of 18%. Postings are as follows:

D19 - K68.02 - VAT has been charged for payment to the budget

In what cases we accept VAT offset

But the tax onvalue added not only needs to be paid to the budget. It can also be reimbursed - that is, reduce the amount payable to the budget by the amount already paid to the supplier of works, goods, services or fixed assets. In addition, VAT refunds occur when the previously received advance payment from the customer, made during the sale of works, goods, services to him, is offset. In addition, it is possible to recover previously paid VAT on the amount of construction work performed by the household method. To do this, however, you must follow a number of rules. But here we are talking only about postings, so we will return to them. So, let's consider three cases of VAT refunds.

VAT credit for the purchase of goods, works, services

VAT postings for this operation are quite simple:

• D08, 10, 26, 20, 23, 41 - K60 - goods, works, services received from the supplier;
• D68.02 - K19 - the amount of VAT presented by the supplier when purchasing goods, services or works on the basis of his invoice was accepted for deduction. In this case, a prerequisite for offsetting VAT is the fact of acceptance of works, goods, services, fixed assets or materials for accounting.

Refund of previously paid VAT upon receipt of advance payment

In this case, VAT is credited in the month in which the advance payment received from the customer is closed by the sale to him. The VAT entries are as follows:

• D62 - K90.01 - reflects the sale of services, goods, works to the customer;
• D68.02 - K76AB - the amount of VAT previously accrued from the amount of the advance is accepted for offset.

VAT refund from self-conducted construction and installation works (ownership)