The reflection of the liquidation of the last form 303 is an important part of the accounting closing.
It is useful to take advantage of the closing to carry out checks on the VAT accounting.
When closing the accounting and tax returns, one of the key adjustments has to do with VAT accounting. This is so, in principle, because VAT accounting itself denmark email list requires the reflection of the liquidation of the last period ( month or quarter ) of the year.
Furthermore, the closing of the tax return is a very important moment to make other adjustments and checks. In the case of VAT, the benefit is twofold: you will avoid both accounting and tax errors.
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Application of the pro rata rule and its accounting
If you carry out both exempt and non-exempt activities, you must apply the pro rata rule . This determines the part of the input VAT that is deductible based on the proportion of non-exempt activities.
Throughout the year, you will have applied the provisional apportionment and, with it, a certain percentage to the VAT paid. The remainder, which is not deductible, will have increased the purchase price.
If you perform both exempt and non-exempt transactions, you should pay special attention to the apportionment.
At closing, when determining the final apportionment , the higher or lower deductible VAT will not modify the purchase price of the goods and services acquired. The following procedure will be followed:
If the final apportionment is higher than the provisional one , you will debit account '472. Public Treasury, VAT incurred ' with a credit to accounts 6391 and 6392. In account '6391. Positive adjustments to VAT on current assets' you will include the higher deductible VAT in current assets. Meanwhile, in account '6392. Positive adjustments to VAT on investments' you will include the higher deductible VAT on investments.
If the final apportionment is lower than the provisional apportionment , you will debit accounts 6341 and 6342 with a credit to account '472. Public Treasury, VAT incurred'. In account '6341. Negative adjustments to VAT on current assets', you will record the lowest deductible VAT in current assets. In account '6342. Negative adjustments to VAT on investments', you will record the lowest deductible VAT on investments.
Start of marked textSHARE! Learn how to adjust your VAT accounting correctly before the end of the financial year.End of marked text
Other adjustments in VAT accounting at the end of the financial year
VAT is a tax that can be subject to many adjustments . Some of them are made at the closing; others, when there is evidence or when a specific circumstance occurs. However, the latter can coincide with the closing because it is a good time to carry out checks . You can make adjustments related to various aspects.
Regularization of investment assets
At closing, you may have to make positive or negative adjustments to VAT due to significant differences in the apportionment . The difference between the VAT that prevailed in the year of acquisition and that of subsequent years is valued.
Mistakes from previous exercises
Whether they are errors of fact or law, they can have consequences for VAT. If this is the case, the charge or credit of account '472. Public Treasury, VAT borne' or '477. Public Treasury, VAT charged' will be made against a reserve account.
Modification of the tax base
There are circumstances that may require a rethinking of the accounting of the entire transaction . In some cases, this will involve positive or negative adjustments to the output VAT and the deductible input VAT. In addition, there may be a non-deductible part. We are talking about situations such as, among others.
