Problem: How to decrease the output VAT previously recognized on an advance payment?
Solution: Create an Output VAT Transaction to decrease the output VAT previously recognized on an advance payment.
Assume you have received an advance payment of AED 1,000 (VAT inclusive at 5%), and you need to reduce the output VAT previously recognized for this advance.
...
Dr VAT Accrued on Prepayments Received — Cr Current VAT Payable — AED 47.62
Steps to Decrease the Output VAT
- Go to Taxes → Tax Documents → Output VAT Transactions.
...