VAT on advances received: posting, examples

When transferring the amounts for future deliveries, the seller must invoice. The buyer can deduct the tax without waiting for the sale. This amendment in the Code was created to reduce the tax burden. How does the deduction of VAT from advances received in practice occur?

Interconnection

If the prepayment is received in full or in part for future deliveries, the business entity is obliged to charge VAT and issue an invoice. This tax amount is then deductible on the basis of the relevant shipments. Next, we will consider in detail how VAT is offset from advances received from the client.

The invoicing period is limited to five days. Exceptions are cases where the shipment was made within the specified period. But how to be a buyer who transfers funds at the end of the current period, if the seller does not issue invoice? According to the interpretation of the arbitration court, a "payment advance" can be recognized as payment received in the same period in which the sale of the goods occurred . In addition, for failure to fulfill the obligation (invoicing), according to Art. 120 NC, the company can be held liable:

• 5 thousand rubles, if the violation was during one period;
• 15 thousand rubles. - in several periods;
• 10% of the amount (minimum 15 thousand rubles.), If the tax base was understated.

In the case of long-term supplies (oil, gas, etc.), you can draw invoices at least once a month. The document must be issued in the same period in which the advance payment was made.

Billing

The document should include:

• Name, address, TIN of the parties to the transaction;
• Number and date;
• The name of the goods;
• Amount of advance payment;
• Tax rate;
• The amount of VAT.

In the case of prepayment, the invoice should indicate the tax rate as a percentage of the base. According to these data, then VAT is recorded with advances received. As for the name, in the invoice you can indicate the name of the groups of goods without detailed decoding.

Decor

1. Prepayment is carried out under the contract, the buyer wants to take into account VAT from advances received.

In this case, you need to keep track of the status of mutual settlements, clearly determine the ownership of a particular payment for delivery. It is also worth asking the buyer to specify the prepayment amount in the comments to the receipt. Such control is required, since:

• The invoice is independently generated by the client in 1C, it is issued and printed out in 2 copies.
• The advance amount is calculated on the basis of the data of the document "Debt repayment". If the calculation method is "Automatic", the difference will be calculated based on the balances 62.01. After closing all debts, the balance will be transferred to 62.02. This amount will be displayed in the invoice. Therefore, before registering a document, you need to make sure that the information presented in the database is up-to-date.

2. The invoice was issued only in one copy.

The document "Registration of invoices for advance payment" is created, which automatically generates balances for all unpaid prepayments. This method has its limitations. Before registering the document, you need to make sure that:

• The sequence of calculations is relevant;
• There are no duplicating counterparts and contracts;
• The outstanding balances are shown on account 62.01;
• Balance on advances - to 62.02;
• There are no closed balances on account 62.02 ;
• In case of changes in mutual settlements, you must re-write the document.

Charging VAT

The algorithm of the process has not changed. The base is determined either on the day of shipment or at the time of payment. The seller must pay the tax on the transferred amounts, and the buyer - VAT on the advances received.

Example. On the account of OOO 15.05 there was an advance payment in the amount of 118 thousand rubles. (Including tax - 18%). The organization shipped 25.05 for the amount of 85 thousand rubles. In the accounting of the enterprise, this operation will be reflected in this way:

15.05:

• ДТ 51 КТ 62 - prepayment is reflected (118 thousand rubles);
• ДТ 76 КТ 68 - 18 thousand rubles - VAT on advances received. Postings are formed on the basis of the account from 15.05.

If between the payment of funds and the presentation of VAT takes a long time, the operation can be formalized with such posting:

ДТ 19 КТ ТС (Technical account of accounting with counterparties) - 18 thousand rubles.

ДТ 68 КТ 19 (presentation of VAT to deduction) - 18 thousand rubles.

In the reporting, the debt of the supplier is reflected in the full amount. The VAT appears in the accounts for tax payments.

25.05:

• ДТ 90 КТ 41 - cost of goods sold (85 000);
• DT 62 KT 90 - income from sale (118,000);
• ДТ 90 КТ 68 - accounting of sales tax (18 000);
• DT 68 CT 76 - deduction of VAT on advances received (18 000);
• DT 62 "Prepayments" CT 62 "Settlements with buyers" - prepayment (118 000).

Here's how the VAT is calculated from advances received.

Accounting of the tax from the buyer

The client, transferring the advance payment for the delivery, is subject to deduction of the amount of tax, presented by the seller on the basis of such documents:

• Accounts;
• Payments confirming the transfer of funds;
• Contract.

Let us consider them in more detail. The Ministry of Finance does not provide for a special form of invoices used in respect of prepayment. Therefore, you can apply a standard document sample. If the contract contains a condition on the transfer of money without specifying the exact amount, then a deduction is levied on the tax calculated on the basis of the figures indicated in the invoice issued by the seller. If there is no such item at all, then it is impossible to compensate for the tax.

The deduction of VAT on advances received

The Tax Code provides for the taxpayer's right to compensation for the amounts paid. If the enterprise uses it in relation to deductions for goods received, the amount of tax will not be understated.

VAT recovery from advances received occurs in the event of the buyer transferring funds to account for future deliveries. You can compensate for the tax in one of these periods:

• When the amount of tax on acquired work is subject to deduction;
• If the conditions have changed, the contract was canceled or the prepayment amount was refunded.

VAT on advances received will be restored in the amount in which it was previously accepted. Here it is worth paying attention to such a moment. The refund of the received VAT advance, which was accepted at 100% prepayment for deliveries made by individual lots, occurs in the amount corresponding to the amount of tax indicated in the invoices. In the invoices themselves, the amount of the prepayment should not be singled out as a separate item.

Example

We take the conditions from the preceding problem. 15.05 the buyer transferred an advance to the seller's account in the amount of 118,000 rubles. 25.05 the seller shipped the goods in the account of the received funds for the amount of 100 thousand rubles. The process of VAT formation from advances received, posting of the transaction is presented below.

15.05:

• DT 60 KT 51 - advance payment (118 000);
• DT 68 CT 76 - reflection of the amount of tax (18 000).

25.05:

• ДТ 41 (19) КТ 60 - the goods (100 000) have been credited and the amount of tax (18 000) is reflected;
• DT 68 CT 19 - accepted for the deduction of VAT (18 000);
• ДТ 76 КТ 68 - the tax has been restored (18 000);
• ДТ 60 «Settlements with suppliers» КТ 60 «Prepayments» - 118 000 - advance payment.

It is very important to correctly calculate the amounts of taxes payable to the budget. Based on these data, a VAT declaration is formed. Advances received, transferred and accrued on them amounts of tax directly depend on the correctness of calculation of accounts receivable (DZ) and creditor (KZ) debts.

Description of the subject matter

Receivables for amounts paid for the acquisition of goods are reflected in the balance sheet in the amount actually transferred. Before the opportunity to deduct the tax, these figures appear as a negotiable asset. Such debt shows the right of the enterprise to receive the provided facilities in the appropriate quantity, quality and necessary equipment. The funds can be returned only if the contract is terminated earlier than the deadline, the supplier's inability to fulfill obligations and other similar circumstances. But in the worst situation, an enterprise can receive not only previously paid amounts, but also compensation. Therefore, in the BU the DZ estimate should not reflect the amount of costs, but the cost of the equipment being acquired when it is entered in the accounting records. This figure corresponds to the prepayment amount without VAT from advances received.

Tasks

Let's consider some more examples of calculation of the sums of the tax.

1. Delivery of goods for the amount of 118 000 including VAT.

• ДТ 08 (19) КТ 60 - materials (100 000) were received and account of the supplier (18 000) was taken into account;
• DT TS (technical account for mutual settlements with counterparties) CT 68 - VAT recovered (18 000);
• DT 68 CT 19 - the tax is accepted to a deduction (18 000).

2. Reflection of an advance issued without the right to deduct VAT.

From the buyer's side:

• DT 60 KT 51 - advance payment has been paid (118 000);
• ДТ 19 КТ ТС - accepted for VAT accounting (18 000).

From the seller:

• ДТ 08 (19) КТ 60 - received the equipment (100 000) and accepted the seller's account (18 000);
• DT TS KT 19 - the amount of the tax was restored (18 000);
• DT 68 CT 19 - tax (18 000) is deductible.

Another option for processing the operation.

From the seller:

• DT 51 KT 62 - prepayment received - 118 000;
• DT TS KT 68 - the tax is charged - 18 000.

From the buyer:

• DT 62 KT 90 - sales of products (if 62 is used as a technical account, the record is formed for the amount of one hundred thousand rubles) - 118 000.
• ДТ 90 КТ 68 - the amount of tax from the sold products is reflected (posting is not created if 62 accounts are included) - 18 000;
• ДТ 68 КТ ТС - the amount of tax is restored (posting is not created if 62 accounts are included) - 18 000.

Reconciliation of mutual settlements

In the acts may be indicated amounts with or without a tax. It is better to specify both numbers. The actual debt is non-monetary, that is, does not include the amount of taxes. But when offsetting advance payments or having complicated settlements under contracts, VAT numbers can be used to calculate the total debt.

Exceptions

The legislation provides for cases when the accrual and payment of VAT on advances received is not provided:

• For goods that were sold outside Russia;
• For work, taxed at a rate of 0%;
• For services for which no tax is charged at all;
• If the company does not pay VAT at all;
• If the duration of the production cycle exceeds six months (the list of such goods is approved by Resolution No. 468).

In order not to charge a tax on prepayments for work with a long cycle of manufacturing products, it is necessary together with the declaration to submit a document confirming the features of the technological process to the tax copy of the contract with the buyer.

An enterprise can take advantage of a benefit if the accountant keeps separate records of transactions with a long production cycle, the amount of VAT on the materials that are involved in this process. These requirements are established by the Tax Code of the Russian Federation.

If these conditions are not met, the advance tax is charged on a general basis. Deferral is not granted. If the seller has accrued VAT in one quarter, and has granted documents for the benefit in another, he can not reduce the tax base, change the account or submit a "clarification". The procedure for conducting complex accounting is not legally established. Therefore, it is regulated by the internal policy of the organization.

The disadvantage of this scheme is the following: the amount of VAT on goods purchased for long-term production, the organization can only take into account on the day of sale of products. If an enterprise received an advance payment without paying a tax, then it will not be possible to refund VAT from the budget, until the products are sold. Therefore, before using a benefit, you need to evaluate the economic benefits of the operation.

Conclusion

When receiving an advance payment for future deliveries, the buyer must invoice and charge VAT. As a result of shipments, these amounts are deductible. The correct calculation of the amounts depends on the correct estimation of accounts receivable and payable. The main rule is that in the balance sheet the amounts paid for the goods must be displayed separately from the tax. In addition, the deduction of VAT from advances received is the buyer's right, and not a duty. The amounts are calculated based on the invoices. And if the seller gives the invoice untimely, he will be fined for the amount of 5 to 15 thousand rubles. This is spelled out in the Tax Code of the Russian Federation.