VAT adjustment - expenses
The amount of VAT invoiced during a purchase can be totally or partially collected by the company, depending on the position of the company concerning fiscal rules.
The recovered VAT amount is determined upon creation of an expense using the temporary deduction coefficient applied to it. The deduction coefficient is equal to the multiplication of the 3 following coefficients (rounded with 2 decimals higher):
1/ The liability coefficient.
This reflects the ratio of use of the asset for taxable operations.
2/ The taxation coefficient
This reflects the principle according to which, regarding taxable operations, only the tax on assets or services used for operations to have deduction right can be deduced.
Its value is defined for the activity sector to which the asset is assigned.
3/ The admission coefficient
This reflects the maximum tax proportion authorized for a liable to deduce from an expense.
The deduction right initially exercised can be put into question when the final deduction coefficient applied to the expense is set. This processing is used to calculate the adjustment amount and update the recovered VAT rates and amounts on expenses not linked to assets.
It must be set up before closing.
Only the following expenses are taken into account by the processing:
- those whose sector of activity has been specified and for which the final taxing coefficient has been forced,
- those whose residual adjustment duration is longer than or equal to 0,
- expenses that are not linked to assets,
- expenses for which the posting date is within the current or next fiscal year of the Accounting and fiscal context.
- expenses where the CoA or IFRS accounting nature is FA in service; it can also be expenses whose nature is FA in process if the REGENCOURS parameter:Fas in process: VATadj is set to Yes.
Notes:
1/ The collected VAT for an expense linked to an asset is not revised. The adjustment is carried out on the asset.
2/ When an expense is unlinked from an asset, the invoiced VAT for this asset is reduced by that of the expense and the collected VAT is re-calculated by applying the collection rate to the new invoiced VAT amount.
Prerequisite
Refer to documentation Implementation
Screen management
This function is composed of:
- a header that is used to specify the process options and to choose the company and the sites for which the VAT adjustment processing must be carried out,
- the Parameter definition tab that displays the start and end dates of the current fiscal year for the Accounting and fiscal context for the selected company.
Header
Presentation
The header contains the processing options and is used to select the company as well as the financial site(s) for which a VAT adjustment processing is required.
Close
Fields
The following fields are present on this tab :
Options
| This check box is selected by default and runs the closing in simulation mode. In this case, controls and the process are carried out but there are no updates recorded in the database. Clear this check box to run in actual mode. In this case, you cannot reverse the closing and updates are recorded in the database. If you are using intermediate commits, it is recommended that the NIVTRACE – Log file level parameter (AAS chapter, MIS group) value is 0. |
| This indicator can be accessed only when one or several reports are linked to the massive process. In this case, the activation of this indicator enables the user to print these reports. |
| A log file is automatically displayed on process completion, showing the processing parameters. A Statistics section gives the number of selected assets, the number of assets updated as well as the number of assets not processed due to an error. Assets with errors are listed with their error reason. The viewing and printing of log files are possible at any time via the report code ATRACE - Print log file print request, obtained from the Supervisor function in the Print/Group print menu. |
Grid Company selection
| Help common to all the mass processings.
|
| This field displays the company code. |
Grid Site selection
| The grid displays the list of the sites attached to the companies and for which the user has authorizations. |
| Identification Code for the company which the site is linked to. |
| Identification code of the site. |
Close
Options
- Simulation:
This check box, selected by default, is used to carry out a VAT adjustment simulation. The modification of the expenses is not recorded in the database.
The impact of the processing on the expenses can be viewed in the log file displayed at processing completion.
- Detailed log file:
A log file is automatically displayed on processing completion, showing the options for this processing, the selected company and sites, as well as the number of selected expenses and the number of expenses that have been subject to a VAT adjustment.
When this check box is selected, the log file is displayed in the form of a detailed report showing, in addition to the information specified above, the list of expenses that have been subject to a VAT adjustment.
For each of the expenses the following information is displayed: Sector of activity, Provisional deduction coefficient and final VAT deduction coefficient, recovered VAT amount, VAT adjustment amount and balance sheet value with regards to the CoA accounting standards.
Note: the viewing and printing of the log files is possible at any time via the Print log file print request of the ATRACE report code, obtained from the Supervisor function in the Print/Group print menu.
Company selection – Site selection
These tables display both the list of managed companies which the user is authorized for, and the list of financial sites linked to these companies which the user is authorized for.
When company parameter ACCPERCTL - Accounting period control(chapter AAS, group CPT) is set to Yes, the company is not displayed in the list when at least one of its contexts is not synchronized with the accounting period/fiscal breakdown. In this case, it is necessary to launch the processing ofcontext synchronization.
The situation of de-synchronization of a context can be viewed in theDetailed status of contexts, in the Calculation tab (the value of the field Modification type is CNX and the value of the field Parameter modified is DESYNC).
It is necessary to select the company and the sites in which the expenses involved in the processing, are registered. By default, after the company selection, all its sites are selected. The user can de-select those that are not concerned by the processing.
Provided they belong to the same company, the site(s) involved in the processing can be directly selected, in which case the company to which they belong is automatically selected.
Reminder: it is mandatory that the expenses be referenced in the financial sites linked to the same company. Selecting a second company, or sites linked to another company, leads to the de-selection of the first company selected, after validation of a confirmation message.
Tab Setup definition
Presentation
This tab displays, for information, the start and end dates of the current fiscal year for the Accounting and fiscal context, for the selected company.
Close
Fields
The following fields are present on this tab :
Block number 1
| This field, non modifiable, contains the start date of the current financial year of the context Accounting and financial for the selected company. |
| This field, non modifiable, contains the end date of the current financial year of the context Accounting and financial for the selected company. |
Close
Process description
The expense adjustment processing is applied before closing to each expense for which there is a variance between the temporary coefficient and the final deduction coefficient.
Adjustment amount:
It corresponds to:
Deductible VAT calculated using the final deduction coefficient - deductible VAT calculated using the temporary deduction coefficient.
This adjustment consists in:
--> An additional VAT deduction if the result of the calculation is positive
--> A VAT repayment if the result of the calculation is negative.
- The taxing and deduction coefficients as well as the recovered VAT rates and amounts are updated in the Main tab of the Expenses function.
- A VAT adjustment – Expense (ELOFVATREG) event is generated to enable the posting of the repayment or the VAT additional deduction.
Example:
Given an expense corresponding to an asset purchased in 2008 for 10,000.
- The invoiced VAT rate is set at 19.6%, i.e. an invoiced VAT amount of 1,960.
- Provisional deduction coefficient = (1 x 0.5 x 1) = 0.5
Subjection coefficient = 1
Taxation coefficient = 0.5
Admission coefficient = 1 - Recovered VAT amount = €1.960 x 0.5 = €980.00
1st case: before the 2008 closing: the final taxing coefficient is set to 0.7
- Definitive deduction coefficient = (1 x 0.7 x 1) = 0.7
Subjection coefficient = 1
Taxation coefficient = 0.7
Admission coefficient = 1 - Recovered VAT amount = €1.960 x 0.7 = €1,372.00
A VAT adjustment of an amount of €392 (1.372 - 980) is found, corresponding to an additional VAT deduction.
2nd case: before the 2008 closing: the final taxing coefficient is set to 0.7
- Definitive deduction coefficient = (1 x 0.3 x 1) = 0.3
Subjection coefficient = 1
Taxation coefficient = 0.3
Admission coefficient = 1 - Recovered VAT amount = €1.960 x 0.3 = €588.00
A VAT adjustment of an amount of - -392 (588 - 980) is found, corresponding to a VAT repayment.
NB:
1/ This VAT adjustment process must be submitted before the closure of the Accounting and fiscal fiscal year.
2/ This processing can be carried out several times, because only the expenses that have a final VAT deduction coefficient different from the temporary coefficient are taken into account.