Making Adjustments on a VAT Return

Note:

This feature requires the International Tax Reports SuiteApp.

Sometimes, you may need to increase or decrease VAT on sales or purchases and VAT liability. For example, you may need to reclaim tax you already paid on sales that turned into bad debts. There may also be events that make sales as taxable or not, or events that render VAT on purchases as creditable or not. This may require you to adjust the tax amounts on your VAT return.

Being able to adjust your VAT return in NetSuite is important if you want to use the XML files generated by NetSuite for electronic tax filing. You can make adjustments to the report on the report page before you click Export to XML (or Submit Online if the report is UK VAT 100).

For each adjustment that you make on the VAT report, you don't have to manually create an adjustment journal entry. NetSuite automatically does it for you.

Important Things to Note:

The adjustment journal entry is posted automatically, even you've enabled the Require Approvals on Journal Entries preference in your account.
The posting date for the adjustment journal entry is the last day of the selected tax period.
Adjustment journals aren't included in the saved reports for Sales by Tax Code or Purchase by Tax Code, but they are included in the VAT drilldown report.
If you need to reverse an automatically created tax adjustment journal, you'll have to manually edit the journal and enter the reversal date. This ensures that the VAT report drilldown report is correct.

To adjust a VAT return:

Go to Reports > VAT/GST > Tax Reports (International).
Select the subsidiary, country form, and tax period, and then click Refresh to display the report.
Click Adjust Return to open the Adjust Return page.

Only values for tax amounts will be available for adjustment. The page doesn't display fields or boxes for net amounts, notional amounts, or boxes that derive values from other boxes (for example, sum of box 1 and 2).

Important:
NetSuite shows an alert if you click Adjust Return for a closed tax period. If you want to make an adjustment for that period, you'll need to reopen the period, then close it again after you're done. You can still click the Generate XML button even if the tax period is open.

For UK electronic filing, you can only click the Submit Online button if the tax period is closed. See

Submitting a VAT100 Tax Return Online for UK for more information.
For each VAT form field or box that you want to adjust:
1. Tax Code – Select the tax code that you want to associate with this adjustment. Only tax codes relevant to the particular box or field are available for selection, provided the tax rate isn't 0%.
2. Tax Control Account – Displays the tax control account based on the field or box you're adjusting. This field is populated automatically but you can change it if needed.
3. Amount – Displays the total amount of transactions that use the selected tax code. This field is populated automatically.
4. Adjustment – Enter the amount of the adjustment to make. Make sure you enter a positive number.
5. Action – Select Increase or Decrease to specify if you're increasing or decreasing the value. The New Value field automatically shows the adjusted amount.
6. Memo – This field appears in the header section. This field accepts the default text, or you can enter a new text to describe the adjustment on the journal entry.
7. Memo – This field appears in the transaction line item. Select a name to associate with the journal entry.
8. Department, Class, Location – If enabled, select the department, class, or location to categorize the journal entry. (An asterisk indicates that the field is required.)
Click Save. NetSuite applies the adjustments to the VAT report and creates a journal entry for each adjusted tax amount.

Important Things to Note:

To adjust a VAT return:

Related Topics: