It turns out that a taxpayer shall pay to the budget only the tax from the difference between incomes and expenses. This is because VAT, included in the cost of expenses, has already been paid by its suppliers.
The tax base for calculating the output VAT is not only incomes from sold goods, works or services, but also the cost of property donated and the object of construction and installation works. "Import" VAT is levied on goods imported into the territory of the Russian Federation.
In bookkeeping accounting, an accountant will need the following entries to record the output
- Debit 62 Credit 90 – it shows revenue from the sale of goods, works, services or property, whereas the confirming documents will be a waybill (act) or an universal transfer document for a client-legal entity and a receipt for a retail buyer;
- Debit 90 Credit 68 – VAT was accrued. At this moment the client is issued with a VAT- invoice, a record in the Sales Ledger is made, and the retail buyer can see the line "including VAT" in the receipt.
Input VAT is indicated in VAT-invoices, issued to you by suppliers. However, not all VAT- invoices are suitable for VAT recovery; they are summed up only on those expenses, which were incurred for the production of sold goods and other need of an organisation, aimed on profit obtainment.
- Debit 10 Credit 60 – suppliers' materials for the production of goods were entered into books according to a waybill;
- Debit 19 Credit 60 – VAT was allocated for deduction according to a VAT-invoice, received from the supplier;
- Debit 68 Credit 19 – the amount, claimed for deduction, is recorded in the Purchase
Recovered VAT is a part of input VAT, which shall be returned by companies to the budget in certain situations.
- Debit 19 Credit 68 – VAT, previously accepted for deduction, was recovered;
- Debit 91.2 Credit 19 – the recovered amount of VAT was written off to other expenses.
At the beginning of activity or for some reasons already in the process of work, any taxpayer applying the general taxation system can ask for exemption from VAT in accordance with p.1 art.145 the Tax Code of the Russian Federation.
For this, revenue, excluding VAT, for the last 3 months should not exceed 2 million roubles, and the products should not include excise goods.