Posting the Net VAT to the VAT Liability Account

VAT is determined by computing the output VAT from sale transactions less the input VAT from purchase transactions. In NetSuite, input VAT is applied by default to a VAT asset account, and output VAT is applied in turn to a liability account. At the end of a tax period, you can make a journal entry to account for the final VAT in the appropriate liability account so you can pay your VAT tax liability.

To post net VAT (output VAT less input VAT) to the VAT Liability account:

1. Go to Transactions > Financial > Make Journal Entries.

   • Select the posting period for this journal.

   • Pick or enter a date for the journal entry.

   • In the Account field, select VAT on Purchases.

   • In the Credit column, enter the amount you want to apply to the VAT Liability account.

2. Click Add.

3. In the Account column, select VAT Liability. The amount you entered on the previous line automatically fills in the Debit column.

4. Click Add.

5. Click Save.

6. Go to Transactions > Financial > Make Journal Entries.

   • Select the posting period for this journal.

   • Pick or enter a date for the journal entry.

   • In the Account field, select VAT Liability.

   • In the Credit column, enter the amount you want to apply to the VAT Liability account.

7. Click Add.

8. In the Account column, select VAT on Sales. The amount you entered on the previous line automatically fills in the Debit column.

9. Click Add.

10. Click Save.

To pay your tax liability, read Paying Tax Liabilities - Non-U.S. Editions and Nexuses.

Related Topics

• Setting Tax Preferences
• Setting Tax Rounding Levels, Methods, and Precision Settings
• Managing Tax Codes
• Philippines Tax Codes
• VAT Reports - Philippines
• Tax Accounting Overview
• Enabling and Setting Up Taxation Features
• Advanced Taxes
• Paying Tax Liabilities - Non-U.S. Editions and Nexuses
• Accounting for Value Added Tax (VAT) - Philippines

General Notices