Page History

A company An entity cannot recover the previously registered earlier claimed input VAT amount if the following happens:

...

• The goods / services have been were received by the companyNo payment was made after entity.
• After more than 6 months from the purchase date, the entity still hasn't paid. 
• The supplier had written off the entity's debt, thus decreased their output VAT accrued and notified the entity about it.

How to process

Where: Purchasing > Purchasing Documents > Debit Notes

Create a  Debit Note On the list of existing debit notes, click Create to open a new debit note (with Mutual Settlements Adjustment  as the Transaction TypeAdjustment as the transaction type) for the amount of the written off debt. Make sure you select the Advance check box for the bad debt . on the Documents tab. For details, refer to Creating a Debit Note.

Where:

...

Taxes >

...

Tax Documents > Input VAT Transactions

Create an Input VAT Transaction to register the decrease in the input recoverable VAT.

1. Click Create to create a new Input VAT Transaction.
2. In the Company box, select the supplier.
3. In the Transaction Type field, select Invoice ReceivedBad Debt.
4. In the Adjustment Type field, select Decrease.
5. Make sure the link below the fields contains Prices Include VAT. Otherwise, click the link to open the Prices and Currency dialog box, select the Prices Include VAT check box there, and close the dialog box.
6. Select the Decrease Recoverable VAT check box to decrease the recoverable taxable and VAT amounts.
7. Optionally, in the Basis field, select the debit note with writeoff.
8. Click Save to assign the number to this document.
   
   Image Added
   
   
9. On the Inventory/Services tab, click Add to append a new line.
10. In the Contents column enter any comment for the transaction, for instance Payables writeoff.
11. In the Amount column, enter the written off amount about which the supplier has notified your company.
12. In the VAT, % column, select the standard rate.
    Image Removed
    Image Added
    
    
13. Click Post to register the document in the system.

...

In the VAT Return

...

Update the VAT Return report document for the appropriate tax period, make sure the adjusted VAT amount appears in row 9: Standardrow 9: Standard-Rated Expenses, in the  the Adjustments column.