Problem: How to Apply Reverse Charge to Imported Services?
Solution: Use system settings as shown.
A) By invoice received:
1. Create an Invoice Received for Imported Services (Purchasing > Invoices Received).
In document parameters, set taxation parameter as Import:
See also 4.2.3.1. Invoices Received (Receipt From Supplier)
2. On the Expenses tab, check the box Apply Reverse Charge for Services for filled expenses:
3. Once the document is posted, check the Debit and Credit transactions. The entry should be as below:
B) By Payment documents in case of advance payment (Bank Payment, Cash Payment, Cheque Issued)
1. Select Import taxation and apply import of Services checkbox:
2. Make the payment “Advance” at Payment Details tab:
3. Once the document is posted, check the Debit and Credit The entry should be as below:
To check the result, use Recoverable VAT report or Output VAT report: (Taxes > Taxes Documents ):
Create new VAT Return and choose:
- the VAT period where this reverse entry falls or the current VAT period
- Entity
Report is filled automatically:
Reverse Charge is reflected in boxes 3 and 10. Click on Details to check entries in Recoverable VAT report or Output VAT report:
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