What is VAT transfer?
VAT transfer is the process of offsetting the input VAT that a business is entitled to deduct with the output VAT that the business must pay to determine the amount of tax that the business must pay to the State budget.
Two cases of VAT transfer include:
Carry over to next period: This case occurs when the deductible input VAT exceeds the payable output VAT.
Value added tax refund : When the deductible input VAT is less than the payable output VAT.
VAT transfer
2. Regulations on VAT transfer entries that need to be clearly understood
Principles of VAT transfer
The VAT transfer entry helps accountants determine the VAT payable during the tax period, understand cash flow and prepare financial reports to support business leaders in making business decisions.
Some principles of VAT transfer that business accountants need to pay attention to are:
Enterprises shall carry out the accounting for the transfer of VAT at the end of the period if the enterprise chooses to declare VAT by the deduction method. In case the enterprise declares VAT by the direct method, it is not necessary to carry out the transfer of VAT at the end of the period.
Enterprises that declare VAT monthly must account for VAT at the end of the month and not at the end of the quarter. Conversely, if an enterprise declares VAT quarterly, it must account for VAT at the end of the quarter.
Carryover of VAT at the end of the period is the offset between the deductible input VAT amount of the enterprise and the output VAT amount of the enterprise must pay.
Account used for VAT accounting
According to Clause 2, Article 52 of Circular 200/2014/TT-BTC , the account used to account for VAT payable is account 3331, including 2 level 3 accounts:
Account 33311 – Output VAT: Used to reflect output VAT, deducted input VAT, VAT on returned or discounted goods, VAT payable, paid, and payable of products, goods, and services consumed during the period.
Account 33312 – Import VAT: Used to 2024 canada telegram number data library reflect the amount of imported VAT payable, paid, and remaining to be paid to the State Budget.
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Formula and method of calculating VAT for each specific case
VAT Accounting
Accounting for output VAT (Account 33311)
a) Accounting for output VAT paya use email marketing ble under the deduction method:
When issuing VAT invoices using the deduction method and the enterprise pays VAT calculated using the deduction method, the accountant reflects cg leads revenue and income based on the selling price excluding VAT, VAT payable is separated at the time of issuing invoices, recording:
Debit accounts 111, 112, 131 (total payment amount)
There are accounts 511, 515, 711 (prices do not include VAT)
Credit account 3331 – VAT payable (33311).
b) Accounting for output VAT payable under the direct method
Accountants can choose one of the following two recording methods
In case at the time of transaction. It is not yet determined whether the input.vat of goods and services is deductible or not.the accountant records the entire input vat amount in. Account 133. Periodically, when determining the. Amount of vat that is not deductible from .output vat the accountant reflects it in related expenses recording.
