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If a bonus/rebate amount is greater than the amount that the entity owes to the supplier, then the difference might be considered an advance payment. If the supplier provided the entity with a proper tax invoice, the company can adjust the recoverable VAT according to the resulted advance amount by creating the following documents:

  • Debit note for the rebate (bonus) applied
  • Input VAT Transaction  to register the resulted taxable advance amount and corresponding VAT amount
  • Tax Invoice Received to register the tax invoice received from the supplier

How to process

Where: Purchasing > Purchasing Documents > Debit Notes

Create a debit note with Mutual Settlements Agreement selected as transaction type for the rebate earned by the entity.  Make sure to select a check box for each document in the Advance column on the Documents tab. For more details, refer to Creating a Debit Note.

Where: Taxes > Tax Documents > Input VAT Transactions

  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 Advance Payment.
  4. In the Adjustment Type field, select Increase.
  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. Optionally, in the Basis field, select the debit note with rebate.
  7. Click Save to assign the number to this document.



  8. On the Inventory/Services tab, click Add to append a new line.
  9. In the Contents column enter any comment to the transaction, for instance rebate taxation.
  10. In the Amount column, enter the rebate (bonus) amount minus the amount that the company currently owes to the supplier.



  11. Click Post to register the document in the system.
  12. At the bottom of the Main tab, enter the number and date of the tax invoice received from the supplier. 
  13. Click the Generate Tax Invoice button. A link to the generated Tax Invoice Received appears.
  14. Review the generated Tax Invoice Received and post it.


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