Understanding Suspended VAT for Russia

VAT amounts that you apply to a suspense (temporary) account in your general ledger accounts instead of to the actual VAT account are referred to as suspended VAT. You might work with suspended VAT when you process transactions for which the VAT is not yet payable or recoverable. For example, VAT might be recoverable only if an special condition exists. If the condition is not yet met, the VAT is suspended until the condition is met. When the condition is met, you release the VAT amount to the actual VAT account.

You can set up your system to automatically release suspended VAT amounts to an actual VAT account for some transactions when you run the General Ledger Post program (R9801). You can also set up the system to leave VAT amounts for some transactions in the suspense account until you manually release the amounts to an actual VAT account or to a profit and loss (P&L) account.

To work with suspended VAT for accounts payable transactions you:

• Set up:

  • Constants.

  • A relationship between voucher tax areas and document types.

  • Which voucher tax areas and document types combinations are released automatically or manually.

  • Processing options that the system uses when you run the General Ledger Post program to automatically release suspended VAT to an actual VAT account.

• Enter, modify, and delete vouchers.

• Post vouchers.

  The system automatically releases suspended VAT for the document type/tax area combinations that are set up for automatic release.

• Post payments.

• Manually release suspended VAT when special conditions are met.

The system uses the suspended VAT process to process vouchers that are:

• Not exempt from tax.

• Have tax rate areas set up for VAT using line one in the Tax/Rate Area Revisions program (P4008).

• Have a batch type of V or W and a tax explanation code of V or VT.

The system uses the base software voucher processing functionality to process these vouchers:

• Prepayment vouchers.

• Documents with a tax explanation code of S or blank.

• Vouchers for which the document type/tax rate area combination is not set up as a voucher for which the suspended VAT process applies.

  You set up the document type/tax rate area combination for vouchers in the Russian VAT Release Type Setup program (P74R4000).