Previously, the payment was the key to the whole process of AP Suspended VAT and Purchase Book functionalities designed for Russia. However, legislative changes in 2006, now makes any dependence on payment obsolete.
According to current legislation, you can record VAT amounts in different ways:
VAT exempt or Zero rated
No suspended Tax records. Purchase Book records taken from the original voucher entry.
VAT for immediate release
Invoices for which there is no need to hold the VAT value in the Suspended VAT account. When you post a voucher in Accounts Payable, the system calculates the VAT amount, posts to the suspended VAT account, and then moves from suspended VAT account to actual VAT account.
VAT Held in the Suspended VAT account until a user releases it to the Actual VAT account
The invoice is released manually. When a voucher is posted in Accounts Payable, VAT amount is calculated and posted to the suspended VAT account and when the original copy of an invoice is received, the VAT amount is moved from suspended VAT account to actual VAT account.
You are required to select a VAT release date method for each company.
VAT Held in the Suspended VAT account until the user writes it off to P&L
Occasionally, after the voucher is entered, it is learned that the special condition never becomes true (or, for some other reason, the VAT can never be reclaimed and must be written-off).
The amount must be cleared from the Suspended VAT account and moved to a write-off account instead of going to the actual VAT account.
You must be able to select which write-off account to use, base your decision on the nature of the original expense. The VAT cannot go to Purchase Book.
VAT Held in the Suspended VAT account until part of it is released to the Actual VAT account and the remainder is written off to P&L
There are admin companies that can only reclaim VAT in proportion to their sales.
At the end of each month, the accountant calculates sales, purchase amounts, and determines the percentage of each transaction that can go to the Actual VAT account.
You can enter the percentage in a processing option of the interactive application to manually release VAT. JD Edwards World offers a default VAT percentage to release, but you can change the value.
In the case of the Purchase Book, the gross and taxable amounts are reduced and prorated to match the VAT.
Reversing the Suspended VAT process
After you select one of the processes to record VAT amounts and find out that the VAT cannot be reclaimed after all, it is necessary to reverse the journals. This is the process that you must use.
If you reverse a voucher in the same month that it is created, then it must not be in the Purchase Book. If you reverse a voucher in a subsequent month, it must be included as a negative line in that second month.
Avoid voiding documents into a new month by entering a credit note instead. All reversal records in the Purchase Book must be recorded on a separate report.
This part provides overviews of suspended tax and discusses how to:
Set up suspended tax
Set up suspended tax user defined codes
Release suspended tax