These are instructions for processing VAT charged in connection with imports.
Premise
- I ordered goods from abroad and paid for them in advance before delivery.
- I paid the forwarder’s invoice (freight, customs + tax as an undifferentiated lump sum, forwarding commission)
- I received a clearance decision from the forwarder, itemising the VAT and customs charges, customs value and VAT basis.
Question
How do I include the VAT in Procountor’s accounting, since the VAT sum cannot be entered directly, but is calculated from the basis using the percentage determined in the menu?
Answer
The original invoice from the forwarder also includes the paid VAT, but a VAT entry has not been made for it. This VAT has been entered as an expense and needs to be corrected since, in reality, it constitutes VAT instead of expenses.
Now that the percentage of VAT from the total sum is known, the VAT from the forwarder’s invoice is posted to another account. The Balancing Difference account has been used in the example below.
Forwarder’s invoice, total EUR 100.00
2880 Payment transaction account |
-100.00 |
|
8450 Other administration expenses |
77.00 |
This is the share of customs |
8890 Balancing differences |
24.00 |
This is the share of VAT |
After this, a separate journal is created for including the share of VAT in the notification and removing from the expenses account the amount of VAT entered from the forwarder’s invoice. The sum that generates the VAT is entered in the first entry and VAT 24% chosen, after which the program will calculate the VAT and add it to the saved sum. The second entry reverses the entry above, apart from the share of VAT. Finally, the last entry balances the expense entry made from the forwarder’s invoice.
Journal
8890 Balancing differences |
100.00 |
24.00 |
Here, 24 is the share of VAT from the previous invoice. |
8890 Balancing differences |
-100.00 |
This entry is the reversing entry for the previous entry of EUR 100 |
|
8890 Balancing differences |
-24.00 |
For the receipt sum to balance out, a reversing entry must be made for the share of VAT. |
Below is another example of how the total customs tax is processed on a single receipt.