Wiki
Value Added Tax
Value Added Tax (or VAT) is an indirect tax. Occasionally you might also see it referred to as a type of general consumption tax. In a country which has a VAT, it is imposed on most supplies of goods and services that are bought and sold.
A VAT return is a form you file to show how much VAT you are due to pay to government. If you’re not registered for VAT, you won’t file VAT returns.
To enable the VAT Return in the application, go to Settings»Accounting»Financial Reports and tick the VAT Return Report and save the changes.
After that you will be able to create VAT from the Tax rates and use it in your invoices.
Make sure that Flat Rate Return is not selected in your Tax Settings under Financial Settings, otherwise the VAT Return will not show balances.
After the VAT tax is created, it can be used in transactions like Sales Invoice and Purchase Invoice.
When Tax Inclusive is chosen, the system takes your total price of 22,000 and then calculates what the rate would need to be to reach the total of 22,000 when a 5% tax is applied. Here is the formula:
- tax excluded price = total item price / ((tax rate /100) + 1)
- inclusive tax amount = tax excluded price * tax rate
By setting up No Tax, the system considers there is no tax at all in the transaction and the Tax column becomes disabled.
The VAT can be tracked using the VAT Return available from the Accounts Reports.
Once you save the VAT Return it will be copied to the VAT Report.
See also
- Purchase Order for Fixed Assets
- Goods Delivered Notes
- Sales Quote
- Sales Order
- Sales Invoice
- Recurring Invoice
- Request for quote
- Request for purchase
- Purchase Order
- Purchase Invoice
- Recurring Bills
- Fixed Assets
- Company Expense Claims
- Employee Expense Claims
- Customer Center
- Supplier Center
- Products & Services Overview
- Bank Accounts
- Supplier Access
- VAT Reverse Charge Mechanism
- Setting Barcode for a Product
- Items Table
- Run Time Calculation of Exchange gain/loss
- Exporting to Excel and PDF
- Timesheet Invoice
- Budget per Department
- Bank reconcilation
- Dividends Payable
- Assembly Products
- Add New Assembly Item
- What is Non-Inventory Item?
- Add New Non-Inventory Item
- FIFO method of inventory valuation
- What is Inventory Item?
- Add New Inventory Item
- Products/Services Import
- Add New Product/Service
- Intercompany Purchases
- Creating Intercompany Sales Invoice
- Intercompany Sales
- Workflow of Expense Claims
- Purchases / Bills Overview
- Timesheet based Invoice
- Progress Invoicing
- How to convert Sales Quote to Order, Invoice & Project
- Sales Overview
- Serial Numbers
- Accounting Overview
- Landing Cost
- Mark PO as Open
- Purchase Order Actions
- Receive Purchase Order
- Send Purchase Order
- Importing Customer Accounts