In order to create a VAT return, several settings are required to define :
- VAT collection mode (cash or debit),
- The different VAT accounts to use according to the different rates in force
- The VAT collection method
The first step is to set the VAT collection mode. The options are available via the following path: Finance > Accounting > Settings > VAT on incoming payments.
The default collection mode is VAT on debits. Use the checkbox to switch to VAT on receipts. You will also need to set up transitory accounts to enable automated calculations to run smoothly.
Tip : The VAT collection mode can be modified at any time, but to simplify exchanges with the authorities, we recommend that you only modify it at the start of the financial year.
Good to know:
VAT on receipts: VAT is payable on the day of payment for the service (receipt). This method is often used for the provision of services.
VAT on debits: VAT is due on the date the invoice is issued. This method is mainly used for the supply of goods.
- The different VAT accounts
Generally speaking, in accounting, it is preferable to use several output VAT accounts when the company makes sales subject to several different VAT rates.
In KAFINEA, this method is applied to both output and input VAT, for greater simplicity when generating the VAT return.
Parameters are set using strategies, a concept unique to KAFINEA, from the following path: Finance > Accounting > Settings > Account number assignment strategy for Products and Services.
To define output tax accounts, follow the steps below:
- Select : Sales tax accounts
- Define an explicit name, e.g. VAT Collected 20%.
- Select the Tax, corresponding to the rate: in our example 20%.
- Select the context: in our example, sales
- Select the account number: in our example, a sub-account of the output VAT account 44571, e.g. 445712.
The same steps are to be repeated for deductible VAT accounts:
- Select : Purchase tax accountsts
- Define an explicit name, e.g. Deductible VAT 20%.
- Select the Tax, corresponding to the rate: in our example 20%.
- Select the context: in our example, purchasing
- Select the account number: in our example, a sub-account of the input VAT account 44566, e.g. 445662.
All these steps must be repeated as many times as there are VAT rates used for your activity, in each sales or purchasing context.
Important : The VAT strategies you have just created will be used in item strategies for the VAT: Any rate option.