The company registered the shipment with an invoice which indicated VAT rate at 0%; however, when filing VAT Return for the period, the company was not able to confirm the rate with all the required documents. On the VAT Return, the company must reflect the following adjustments: decrease of the 0%-rated sales, increase of 5%-rated sales, and increase in the input VAT amount.
How to process
Where: Accounting > Value Added Tax > Output VAT Transactions
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- Click Create to create a new Output VAT Transaction.
- In the Company box, select the customer.
- In the Transaction Type field, select Invoice Zero-Rating Cancellation.
- In the Adjustment Type field, select Increase Decrease.
- Make sure the link below the fields contains contains Prices Do Not Include VAT. Otherwise, click the link to open the the Prices and Currency dialog dialog box, clear the the Prices Include VAT VAT check box, and close the dialog box.
- Click Save to assign the number to this document.
- On the Inventory/Services tab, click Add to append a new line.
- In the Contents column enter any comment to the transaction, for instance Applying 5% Zero-Rate Cancellation.
- In the Amount column, enter the amount from the original invoice.
- In the VAT, % column, select the 5% 0 % Rate option.
- In the Income / Expense Account column, select the income account from the original invoice.
- Click Post to register the document in the system.
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To reflect the increase of 5%-rated sales and generate a corresponding tax invoice, do the following:
- Click Click Create to to create a new new Output VAT Transaction.
- In the the Company box box, select the customer.
- In the the Transaction Type field, select Zero-Rating Cancellation field, select Invoice.
- In the the Adjustment Type field field, select Decrease Increase.
- Make sure the link below the fields contains contains Prices Do Not Include VAT. Otherwise, click the link to open the the Prices and Currency dialog dialog box, select the clear the Prices Include VATVAT check box there, and close the dialog box.
Click - Click Save to to assign the number to this document.
- On the the Inventory/Services tab tab, click Add click Add to append a new line.
- In the the Contents column column enter any comment to the transaction, for instance Zero-Rate Cancellationinstance Applying 5% Rate.
- In the the Amount column column, enter the amount from the original invoice.
- In the the VAT, % column column, select the 5 % Rate 5% Rate option.
- In the Income / Expense Account column, select the income account from the original invoice.
- Click Post to
- Click Post to register the document in the system.
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