Which is why everyone should speak to a local CPA for official guidance. Regards, Adrien
> On Aug 9, 2018, at 2:25 PM, Christian Kluge <frakturfr...@gmail.com> wrote: > > Hi, > > under certain circumstances VAT can be treated as expense/income, > e. g. in Germany when one’s only required to do cash based accounting. > > In that case payable output tax and refunds would be treated as income > and input tax and vat payments are treated as expense. > > Kind regards > > Christian Kluge > > Am 09.08.2018 um 17:57 schrieb Adrien Monteleone: >> By all means, talk to a local CPA, but usually a pass through is treated as >> a liability. >> >> So you’d have this account: >> >> Liabilities:VAT payable >> >> The invoice transaction would look like this: >> >> Dr. Cash/Checking/etc. >> Cr. Income >> Cr. Liabilities:VAT payable >> >> The debit would be for the full amount received. >> >> The credit to income is just for your services/products. >> >> The VAT is strictly a liability. Those funds don’t belong to you and you >> didn’t earn them so they are not income. >> >> If you pay estimated VAT in advance and then get refunds, that should simply >> reduce your actual liability. So when paying the estimated amount, you’d >> enter a debit to that Liability account, and then each invoice will reduce >> that pre-payment as they are posted. If you receive a refund for excess >> pre-payment you’d enter something like this: >> >> Dr. Cash/Checking/etc. >> Cr. Liabilities:VAT payable >> >> Income shouldn’t enter the picture here. Had you estimated exactly, there >> would have been no refund. >> >> If you receive ‘vendor compensation’ for collecting and remitting the tax >> for the state, that is probably income, but get a professional opinion. >> (Usually a small percentage of the tax due and subtracted when filing.) It’s >> usually not actually paid-back to you, you just get to keep it, though your >> jurisdiction may do otherwise. >> >> Regards, >> Adrien >> >> >>> On Aug 9, 2018, at 8:54 AM, brainwash <ligius+gnuc...@gmail.com> wrote: >>> >>> I don't know how it should be set up as I'm using this only for personal >>> bookkeeping. >>> To answer the question: the VAT is a liability(?) in that I receive it from >>> the customers and have to give it back to the state. >>> There's is also some VAT on expenses but it would be too tedious too track >>> that for each small purchase. >>> >>> With regard to that, the VAT is self-reported and predicted, so I sometimes >>> end up receiving discounts (kickbacks?) from the state. This shows up as >>> income under the "Cash flow", but I guess in that case it makes sense. >>> >>> Regards >>> >>> >>> >>> -- >>> Sent from: http://gnucash.1415818.n4.nabble.com/GnuCash-User-f1415819.html >>> _______________________________________________ >>> gnucash-user mailing list >>> gnucash-user@gnucash.org >>> To update your subscription preferences or to unsubscribe: >>> https://lists.gnucash.org/mailman/listinfo/gnucash-user >>> If you are using Nabble or Gmane, please see >>> https://wiki.gnucash.org/wiki/Mailing_Lists for more information. >>> ----- >>> Please remember to CC this list on all your replies. >>> You can do this by using Reply-To-List or Reply-All. >>> >> >> >> _______________________________________________ >> gnucash-user mailing list >> gnucash-user@gnucash.org >> To update your subscription preferences or to unsubscribe: >> https://lists.gnucash.org/mailman/listinfo/gnucash-user >> If you are using Nabble or Gmane, please see >> https://wiki.gnucash.org/wiki/Mailing_Lists for more information. >> ----- >> Please remember to CC this list on all your replies. >> You can do this by using Reply-To-List or Reply-All. >> > > > _______________________________________________ > gnucash-user mailing list > gnucash-user@gnucash.org > To update your subscription preferences or to unsubscribe: > https://lists.gnucash.org/mailman/listinfo/gnucash-user > If you are using Nabble or Gmane, please see > https://wiki.gnucash.org/wiki/Mailing_Lists for more information. > ----- > Please remember to CC this list on all your replies. > You can do this by using Reply-To-List or Reply-All. _______________________________________________ gnucash-user mailing list gnucash-user@gnucash.org To update your subscription preferences or to unsubscribe: https://lists.gnucash.org/mailman/listinfo/gnucash-user If you are using Nabble or Gmane, please see https://wiki.gnucash.org/wiki/Mailing_Lists for more information. ----- Please remember to CC this list on all your replies. You can do this by using Reply-To-List or Reply-All.
