This chapter contains these topics:
Russian legislation requires that you produce a Sales Book and a Purchase Book report to determine the value added tax (VAT) that is payable or recoverable.
This part, then, provides an overview of the Russian tax requirement and discusses how to:
Generate Accounts Receivable tax invoices
Generate the Sales Book report
Generate the Purchase Book report
VAT is levied by the Russian government on all goods and services. VAT is always calculated based on the value of goods or services plus excise tax. VAT is applicable to the import of goods, and the sale of goods or services inside of Russia and between GIS countries. VAT is also applied to the trade margin for catering and retail-trading companies. The trade margin is the difference between the purchase price and the sales price.
VAT becomes reclaimable after payment for purchased goods or services has been made. An enterprise offsets the amount of paid VAT against a VAT payable account to calculate the amount it actually owes to the tax authority. In some cases, sales of goods or rendering of services are not VAT taxable.
VAT for raw materials is included in the purchase price and accounted for as an inventory cost.
If a company used the cash method of accounting, VAT is not registered until a voucher is paid or an invoice is received. Prior to paying a voucher or receiving an invoice, VAT is accounted for by posting it to a temporary, or VAT receivable, account. When the payment is made or the invoice is received, that amount in the VAT receivable account is posted to the actual VAT account. When partial payments or receipts are made, you reclassify the partial amount
Prepayments are subject to VAT and must be included in the Sales Book report. You post the tax on the prepayment to the credit side of the actual VAT account. When you apply an unapplied cash receipt to an invoice, you reverse the accounting entry, and post the reversal as a void. This reversal is included in the Purchase Book.
Amount differences occur when there is a difference in the exchange rate between currency-equivalent units and the ruble from the invoice date and the payment date. This difference affects VAT and is reported in the Sales Book and Purchase Book reports.
You use the Sales Book report to report to the tax authorities all sales of goods and services for which you received payment. In some cases, you might also report the sale of goods or services for which you have not received payment. The Sales Book report registers invoices issued to customers and prepayments received from customers. It contains VAT amounts for each invoice issued to a customer, including unapplied cash receipts, and the VAT calculated for amount difference vouchers and invoices, if the difference results in a profit.
If your company calculates and pays VAT on a cash basis, then the Sales Book report must include summarized data for each payment date. If the invoice is partially paid, the system prints partial payment on each line of the partial payment.
If you receive prepayments, you must show the sum in your system as unapplied cash, and you must issue to the customer a tax invoice that shows the prepayment amount. When you provided the goods and services for which the prepayment was received, you create a sales invoice, match the invoice to the unapplied cash, and issue a tax invoice to your customer that is based on the sales invoice records.
You use the Purchase Book report to report VAT on paid vouchers. You use this report as a basis for reclaiming paid VAT from the tax authorities.
The Purchase Book report records vouchers after they have been paid and the VAT amounts have been posted to the VAT account from the temporary VAT account. The report includes all purchases of goods and services for which you received and paid for the goods and services. Also, the report includes or excludes the following records:
Paid vouchers for which an additional clause exists and the additional clause is unresolved, are excluded from the report
Partially paid vouchers appear in the report, and are noted as partially paid
Reversed VAT accrued payable transactions from unapplied cash VAT calculations are included
VAT calculated for amount differences when the amount results in a loss.