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Talk:How to manage VAT settlement and payment

Contents

Objective

In this section I'd say something like:

There are several taxes which affects companies running business, taxes such as corporation tax, income tax, value added tax, etc.

Value Added Tax or VAT tax is a tax which must be settled regularly with the tax authority. The way to do that is:

Customer Receivable $X.XXX,XX
Product Revenue $X.XXX,XX
Tax Due (Output VAT) $X.XXX,XX
Product Expense $X.XXX,XX
Tax Credit (Input VAT) $X.XXX,XX
Vendor Liabilty $X.XXX,XX

At the end of the period:

Tax Due (Output VAT) $X.XXX,XX
Tax Credit (Input VAT) $X.XXX,XX
Tax authority (VAT creditor) $X.XXX,XX
and make the payment:
Tax authority (VAT creditor) $X.XXX,XX
Bank $X.XXX,XX
Tax Due (Output VAT) $X.XXX,XX
Tax authority (VAT debtor) $X.XXX,XX
Tax Credit (Input VAT) $X.XXX,XX
in case of compensation:
Tax Due (Output VAT) $X.XXX,XX
Tax Credit (Input VAT) $X.XXX,XX
Tax authority (VAT creditor) $X.XXX,XX
Tax authority (VAT debtor) $X.XXX,XX
in case of payment:
Bank $X.XXX,XX
Tax authority (VAT debtor) $X.XXX,XX

--Psanjuan 10:33, 24 July 2012 (UTC)

New Feedback:

Why you did not copy/paste the accounting above? I've already done it.

--Psanjuan 14:34, 27 July 2012 (UTC)

Recommended articles

Here I would add:

the way to properly account Output VAT in Sales Sales Invoice accounting

and the way to properly account Input VAT in Purchase Purchase Invoice accounting

Besides, I'd say:

Managing taxes requires a clear understanding on how Tax Categories and Tax Rates work in Openbravo.

--Psanjuan 10:48, 24 July 2012 (UTC)

I would remove this part as it has to be described in the execution steps as the required setup

The following set ups are required for the Tax Settlement and Payment process:

--Psanjuan 10:55, 24 July 2012 (UTC)

New feedback:

I've rephrased a little bit. It's ok.

--Psanjuan 14:39, 27 July 2012 (UTC)

Execution Steps

I'd say that:

The company in this example will have to setup Openbravo to get the VAT payment process working properly. This process will help the company to settle the VAT for a given period of time, for instance from July 1st to July 31st, and make the corresponding payment to the tax authorities.

--Psanjuan 11:00, 24 July 2012 (UTC)

Tax authority creation

Please explain here the way to create "Tax Authority" as a Vendor/Customer in Openbravo. And explain how it is going to be used in this process.

--Psanjuan 11:05, 24 July 2012 (UTC)

New Feedback:

I think you did not properly apply my feedback as it was not clearly explained how to create a BP which is both a customer and a vendor.
It is also required to explain the role tax authorities play in this process, that is the reason why I've specified that the payment method and the financial account must be entered for receiving or making the payment.


--Psanjuan 14:52, 27 July 2012 (UTC)

VAT Payment setup

Explain here the way to create the VAT Payment as a GL item, explain why and how it is going to be used in the process.

Put the link to where GL items are explained in the User Guide: GL Item

Above accounts are NOT correct:

--Psanjuan 09:09, 24 July 2012 (UTC)


New feedback:

Please do not put:
Please check Openbravo wiki when more information about how to create a GL item is needed.

but just
G/L items are created in the GL Item window.

--Psanjuan 14:55, 27 July 2012 (UTC)

I've rephrased a little bit and I have removed the image as it is not needed.

--Psanjuan 15:04, 27 July 2012 (UTC)

Tax Register Type setup

Remove the part already described which is the GL item creation.

--Psanjuan 11:32, 24 July 2012 (UTC)

Explain that the company has to create two records in the Tax Register Type window, one for the purchase VAT or Input VAT and the other one for the Sales VAT or Output VAT.

Explain also the reason why. The reason for doing that is because each of them will have the corresponding taxes to take account while running the process to settle the VAT.

--Psanjuan 11:33, 24 July 2012 (UTC)

Please see inline below:

--Psanjuan 11:41, 24 July 2012 (UTC)

New Feedback:

You did not properly take my feedback so I've rephrased. Please take a look.

--Psanjuan 15:22, 27 July 2012 (UTC)

Tax Payment

Please mention here that the company run the business and makes purchase and sales from July 1st to July 31st. Those purchase and sales transactions include VAT and besides the company is allowed to recover 100% of the Output VAT or Purchase VAT.

--Psanjuan 11:44, 24 July 2012 (UTC)

Put the link to where this is explained in the user guide Tax Payment

--Psanjuan 11:45, 24 July 2012 (UTC)

When you say:

"Now, it’s time to Process the tax payment." You should also explain how to POST it. What it is posted is the GL Journal.

--Psanjuan 11:45, 24 July 2012 (UTC)

Shows the G/L Journal image with the right accounts.

--Psanjuan 11:46, 24 July 2012 (UTC)

Please show the posting of both the tax payment transaction and the payment to the government.

--Psanjuan 11:50, 24 July 2012 (UTC)

We need to add another section. A section which describes how to do it in case the company does not have to pay to the tax authorities but the other way around.

--Psanjuan 11:55, 24 July 2012 (UTC)

New Feedback:

You did not properly take into account my feedback so I've rephrased. Please take a look.


--Psanjuan 16:13, 27 July 2012 (UTC)

Retrieved from "http://wiki.openbravo.com/wiki/Talk:How_to_manage_VAT_settlement_and_payment"

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