When transferring amounts for future deliveries, the seller must issue an invoice. The buyer can deduct the tax without waiting for the sale. This amendment to the Code was created to reduce tax burden. How is VAT deducted from advances received in practice?
Upon receipt of an advance payment in full or partial amount for future deliveries, the subject economic activity is obliged to charge VAT and issue an invoice. This tax amount is then deductible based on the relevant shipments. Further, it will be considered in detail how VAT is offset from advances received from the client.
The billing period is limited to five days. Exceptions are cases where the shipment was made during the specified period. But what about the buyer who transfers funds at the end of the current period if the seller does not issue an invoice? According to the interpretation arbitration court, "advance on deliveries" may be recognized as a payment received in the same period in which it occurred. In addition, for failure to fulfill an obligation (invoicing), in accordance with Art. 120 of the Tax Code, the company may be held liable:
In the case of long-term deliveries (oil, gas, etc.), invoices can be drawn up at least once a month. The document must be issued in the same period in which the prepayment was made.
The document must indicate:
In the case of an advance payment, the invoice must indicate the tax rate as a percentage of the base. According to these data then comes with the advances received. As for the name, the invoice can indicate the name of the groups of goods without detailed decoding.
1. Prepayment is made under the contract, the buyer wants to take into account VAT on advances received.
In this case, you need to track the status of mutual settlements, clearly determine whether a particular payment belongs to the delivery. It is also worth asking the buyer to indicate the amount of the prepayment in the comments to the receipt. Such control is required because:
2. The invoice was issued in only one copy.
The document "Registration of invoices for advance payment" is created, which will automatically generate balances for all non-closed prepayments. This method has its limitations. Before registering a document, you need to make sure that:
The process algorithm has not changed. The base is determined either on the day of shipment, or at the time of payment. The seller must pay tax on the transferred amounts, and the buyer - VAT on advances received.
Example. An advance payment in the amount of 118 thousand rubles was received on the account of LLC on May 15. (including tax - 18%). The organization shipped on May 25 in the amount of 85 thousand rubles. In the accounting of the enterprise, this transaction will be reflected as follows:
If a long time elapses between the payment of funds and the presentation of VAT, then the operation can be executed as follows:
DT 19 KT TS (Technical account for accounting for settlements with counterparties) - 18 thousand rubles.
DT 68 KT 19 (presentation of VAT for deduction) - 18 thousand rubles.
In the reporting, the supplier's debt is reflected in the full amount. VAT appears on tax invoices.
Here is how VAT is calculated on advances received.
The client who has transferred the advance payment on account of deliveries shall be subject to deduction of the amount of tax presented by the seller on the basis of the following documents:
Let's consider them in more detail. The Ministry of Finance does not provide for a special form of invoices used in relation to prepayment. Therefore, a standard sample document can be used. If the contract contains a condition on the transfer of money without specifying the exact amount, then the tax calculated on the basis of the figures indicated in the invoice issued by the seller is subject to deduction. If there is no such clause at all, then the tax cannot be compensated.
The Tax Code provides for the right of the taxpayer to compensation for the amounts paid. If the business uses it in relation to deductions for goods received, the amount of tax will not be underestimated.
From advances received occurs in the event that the buyer transfers funds on account of future deliveries. You can pay tax in one of the following periods:
VAT on advances received will be restored in the amount in which it was previously accepted. Here it is worth paying attention to such a moment. The refund of the VAT advance received, which was accepted with 100% prepayment for deliveries made by individual parties, occurs in the amount corresponding to the amount of tax indicated in the invoices. In the invoices themselves, the prepayment amount should not be allocated as a separate item.
Let's take the conditions from the previous problem. On May 15, the buyer transferred an advance payment in the amount of 118,000 rubles to the seller's account. On May 25, the seller shipped the goods on account of the funds received in the amount of 100 thousand rubles. The process of formation of VAT from advances received, postings of the transaction are presented below.
It is very important to correctly calculate the amount of taxes payable to the budget. Based on these data, a VAT declaration is generated. Advances received, transferred and accrued on them tax amounts directly depend on the correctness of the calculation of accounts receivable (DZ) and payable (KZ) debt.
Accounts receivable for amounts paid for the purchase of goods, is reflected in the balance sheet in the amount of actually transferred funds. Until the possibility of deducting the tax, these figures appear as current asset. Such debt shows the right of the enterprise to receive the provided objects in the appropriate quantity, quality and the required configuration. Refunds can only be made if ahead of time, inability of the supplier to fulfill obligations and other similar circumstances. But in the worst situation, the enterprise can receive not only the previously paid amounts, but also compensation. Therefore, in the BU, the assessment of the remote sensing should reflect not the amount of costs, but the cost of the purchased equipment when it is posted. This figure corresponds to the amount of prepayment without VAT from advances received.
Let's look at a few more examples of calculating tax amounts.
1. in the amount of 118,000 including VAT.
2. Reflection of an advance payment issued without accepting the right to deduct VAT.
From the buyer side:
From the seller's side:
Another option for processing the operation.
From the seller:
From the buyer:
The acts may indicate amounts both with tax and without it. It is better to indicate both numbers. The actual debt is non-monetary, that is, it does not include taxes. But when offsetting an advance or having complex settlements under contracts, VAT figures can be used when calculating the total debt.
The legislation provides for cases when accrual and from advances received is not provided for:
In order not to accrue tax on prepayments for work with a long production cycle, it is necessary, along with the declaration, to submit to the tax copy of the contract with the buyer, a document confirming the features of the technological process.
An enterprise can take advantage of the privilege if the accountant keeps a separate record of operations with a long production cycle, VAT amounts on materials that are involved in this process. These requirements are established by the Tax Code of the Russian Federation.
If these conditions are not met, advance tax is charged on a general basis. No deferment is granted. If the seller accrued VAT in one quarter, and provided documents for the benefit in another, he cannot reduce the tax base, change the invoice, or submit a “clarification”. The procedure for maintaining complex accounting is not prescribed by law. Therefore, it is regulated by the internal policy of the organization.
The disadvantage of such a scheme is as follows: the amount of VAT on goods purchased for long production, the organization can take into account only on the day of the sale of products. If the company received an advance without paying tax, then it will not be possible to recover VAT from the budget until the products are sold. Therefore, before using the benefit, you need to evaluate the economic benefits of the operation.
When receiving an advance payment for future deliveries, the buyer is obliged to issue an invoice and charge VAT. Based on the results of shipments, these amounts are subject to deduction. The correct calculation of amounts depends on the correct assessment of receivables and payables. The main rule is that in the balance sheet, the amounts paid for the goods must be shown separately from the tax. In addition, the deduction of VAT on advances received is not an obligation. The amounts are calculated on the basis of invoices. And if the seller submits the invoice late, he will be fined from 5 to 15 thousand rubles. This is spelled out in Tax Code Russian Federation.
In this article, which, among others, was placed on the ITS disk, the 1C methodologists talk about how in edition 4.2 of the Accounting configuration for 1C: Enterprise 7.7. reflection of advances in accounting and tax accounting is implemented.
The receipt of a non-cash advance from the buyer is reflected in the accounting document of the standard configuration "Statement" (menu "Documents", item "Statement"). When posting the document, a posting is formed on the credit of account 62.2 "Settlements on advances received (in rubles)" and the debit of account 51 "Settlement accounts" for the amount of the received advance.
When filling in the details of the document, you should pay attention to the choice of the value of the subconto "Agreements" of account 62.2 "Settlements on advances received (in rubles)". The value of this subconto reflects the basis for future implementation - an invoice for payment or an agreement. An advance payment can also be made under the agreement "Without an agreement (official; for payments without specifying an agreement)". This means that when goods (products, works, services) are sold to this buyer, this advance payment can be offset regardless of the contract under which the goods (products, works, services) are sold.
Upon receipt of an advance from the buyer, the accountant is obliged to charge VAT and draw up an invoice in accordance with paragraph 1 of Art. 162 of the Tax Code of the Russian Federation. In typical configuration this operation performed by the document "Invoice issued". It is convenient to enter a new document "Invoice issued" on the basis of the previously entered document "Statement". To do this, in the "Operations on the current account" journal, place the cursor on the required statement, click the "Actions" button and select the "Enter based on" item. In the case when several different advances are indicated in the statement, the system will prompt you to select the required payment from the list. Based on the selected payment, the document "Invoice issued" will be generated, filled out necessary information.
It should be noted that when calculating VAT on advances received, taxation is carried out at tax rates of 9.09% and 16.67% (estimated tax rates), and the tax base is the entire amount of the payment, so the amount of tax calculated upon receipt of the advance should not be equal to the amount of tax calculated upon the subsequent sale of goods (products, works, services).
When posting the document, a posting is formed on the credit of account 68.2 "Value added tax" and the debit of account 76.AB "VAT from advances" for the amount of the accrued tax. In the generated entry on account 76.AB "VAT from advances", as the value of the subconto "Invoices issued", the document "Invoice issued", which generated this entry, is indicated. Thus, in the accounting results, the accrued VAT unambiguously refers to a specific invoice.
The recorded document will be reflected in the sales book as a record of receiving an advance from the buyer.
In all standard configuration documents reflecting the sale of goods (products, works, services), namely:
there is an automatic advance payment function. There are three modes of posting documents:
To select a mode, specify the corresponding value of the "Advance payment" attribute in the document header.
If you specify the document posting mode "Advance payment only under the agreement", then when posting the document, the system will search for advances recorded on account 62.2 "Settlements on advances received (in rubles)" on the same basis (invoice for payment or agreement) on which sale takes place.
If you specify the document posting mode "Advance payment without specifying an agreement", then when posting a document, the system will first search for advances recorded on account 62.2 "Settlements on advances received (in rubles)" on the same basis (invoice for payment or agreement), according to to which the sale is being made. Then, if the value of the sale exceeds the amount of the found advance, the search for advances will continue, but on the basis of "Without an agreement (official; for payments without specifying an agreement)".
If you specify the "Do not credit advance payment" mode, then the advance payment will not be credited when posting the document.
If the advance is found, then a posting will be generated on the credit of account 62.1 "Settlements with buyers and customers (in rubles)" and the debit of account 62.2 "Settlements on advances received (in rubles)" for the amount of the offset advance.
According to paragraph 5 of Art. 171 of the Tax Code of the Russian Federation, VAT amounts calculated by sellers and paid by them to the budget from the amounts of advance or other payments on account of future deliveries of goods (performance of work, provision of services) are subject to deductions. In order to reflect the tax deduction, the accounting should:
These operations in a typical configuration are performed by the "Sales book entry" document. It is convenient to enter the "Sales book entry" document on the basis of the "Invoice issued" document. To do this, in the "Invoices Issued" journal, place the cursor on the invoice entered upon receipt of the advance payment that we credited, click the "Actions" button and select the "Enter based on" item. Based on the specified invoice, a new document "Sales book entry" will be generated, already filled with the necessary information. When posting the document, a posting is generated on the credit of account 76.AB "VAT from advances" and the debit of account 68.2 "Value added tax" for the amount of VAT recovered when offsetting the advance. The recorded document will be reflected in the sales book as an entry that reverses the entry made earlier (the invoice issued upon receipt of the advance).
If the amount of the offset advance is less than the amount of the advance specified in the invoice, then the amounts in the new document "Sales book entry" must be manually adjusted so that the value of the attribute "Total" equals the amount of the offset advance, and the value of the attribute "VAT" - the amount of VAT recovered when offsetting the advance.
If, when offsetting an advance, several advances received earlier were offset (for example, at the time of shipment, several small advances received at different times and issued by different invoices were offset), then on the basis of each of these invoices, you should enter the document "Sales book entry" .
Let the organization issue an advance to the supplier in the amount of 1,200 rubles. In accounting, the transaction is reflected in the posting:
Debit 60.2 "Settlements on advances issued (in rubles)" under the agreement "Without an agreement (official; for payments without specifying an agreement)"
Credit 51 "Settlement accounts" - 1200 rubles. - advance payment to the supplier.
Then, materials in the amount of 1200 rubles were received from the supplier. in view of VAT. The advance payment made earlier was fully credited. In accounting, the receipt of materials is reflected in the postings:
Debit 10.1 "Raw materials"
Credit 60.1 "Settlements with suppliers and contractors (in rubles)" under the agreement "Main agreement" - 1000 rubles. materials have arrived. Debit 19.3 "Value added tax on acquired inventories"
Credit 60.1 "Settlements with suppliers and contractors (in rubles)" under the agreement "Main agreement" - 200 rubles. - allocated VAT on purchased materials. Debit 60.1 "Settlements with suppliers and contractors (in rubles)" under the agreement "Main agreement"
Credit 60.2 "Settlements on advances issued (in rubles)" under the agreement "Without an agreement (official; for payments without specifying an agreement)" - 200 rubles. - previously issued advance payment has been offset. Debit 68.2 "Value Added Tax"
Credit 19.3 "Value added tax on acquired inventories" - 200 rubles. - offset VAT allocated upon receipt of materials.
The operation of issuing an advance to the supplier is accepted for tax accounting by the document "Expense of funds". When automatically filling the document according to the data accounting the condition for the expenditure of funds is defined as "Advance payment for the supply of property, works, services, rights." When posting the document, a posting is generated for the movement of receivables:
Debit N13.01 "Movement of receivables" under the agreement "Without an agreement (official; for payments without specifying an agreement)" - 1200 rubles. - accrued accounts receivable.
The operation of receipt of materials is accepted for tax accounting by the document "Operations for the acquisition of property, works, services, rights." When automatically filling out the document, an attempt is made to determine the condition for the receipt of property: "With subsequent payment" or "On account of previously issued advances." At the same time, the search for advances issued is carried out precisely under the contract under which the property actually enters the organization. Since in accounting the advance payment is reflected under the service contract "Without a contract (service; for payments without specifying a contract)", then from the point of view tax accounting no advance payment was made to the supplier, and the receipt condition "With subsequent payment" is indicated as a condition for the receipt of property. When posting the document, postings are generated for the movement of accounts payable:
Credit N13.02 "Movement of accounts payable" under the agreement "Main agreement" - 1200 rubles. - accrued accounts payable. Debit N13.03 "VAT on accounts payable" under the agreement "Main agreement" - 200.00 rubles. - allocated VAT on accounts payable.
After the documents "Expense of funds" and "Operations for the acquisition of property, works, services, rights" turnover balance sheet on account H13 "Movement of receivables and payables", expanded on sub-accounts, will look like this:
In order to reflect the offset of the advance payment issued, in a typical configuration, the tax accounting document "Setoff of debts on obligations of the parties" is used. At the same time, the values of the details of the document "Debtor" and "Creditor" are the same counterparty - the supplier of materials. As an agreement with the debtor, the agreement "Without an agreement (service; for payments without specifying an agreement)" must be specified, and as an agreement with the creditor - "Main agreement". The form of the document provides for the possibility of automatic filling.
The document must be entered on the same day that the property was received and the delivery was registered in the purchase book. If the delivery was not registered in the purchase book, then automatic filling will not determine the amount of VAT previously allocated from accounts payable and subject to offset. When posting a document, postings are generated:
It should be noted that in the event that an advance payment to the supplier is paid on a certain basis (under the same contract under which the receipt of property is expected), then when the document "Property receipt operations" is automatically filled out, such an operation will be reflected under the condition "On account of previously issued advances ". Then, when posting, the document will generate a posting to reduce the counterparty's receivables (on the credit of account H13.01 for the amount of the previously received advance), and it will not generate a posting on account H13.03 for the amount of VAT. In this case, a debt offset operation is not required.
In accounting, an advance payment is called an advance payment in the form of a sum of money, which is transferred from the buyer to the supplier as payment for services not yet rendered, work not performed, goods not shipped.
The advance payment is not the income of the organization that received it, until certain services are provided to the customer (or the previously paid goods are not delivered to the warehouse). From this article, you will learn about the specifics of the reflection of advances issued and received, as well as the documents on the basis of which postings are made in the accounting of advances.
If an enterprise receives an advance payment for services or work that has not yet been completed under the contract, then such an advance payment is accounted for in the account. Also, this account is used when funds are received for any products that were not delivered to the customer at the time the money was received.
Suppose the firms Omega and Factor entered into an agreement for the supply of printing products, where Omega acts as a supplier, and Factor acts as a buyer. The amount of the contract is 321,000 rubles. 01.10.2015 the customer makes a full prepayment under the contract. 01. .2015 the supplier transfers part of the goods in the amount of 120,000 rubles.
This operation will look like this:
| Dt | ct | Description | Sum | Base |
| Receipt of an advance from the buyer to the account of the company "Omega" | RUB 321,000 | |||
| 68 | (18% of the advance payment) | RUB 48,966 | invoice, bank statement | |
| 90/1 | Supply of printed products | 120 000 rub. | ||
| 90/3 | 68 | VAT charge (18% of the delivery cost) | RUB 18,305 | bill of lading |
| 68 | VAT recovery | RUB 18,305 | bill of lading | |
| Closing the received advance for the amount of the delivered goods | 120 000 rub. | bill of lading |
To account for advances transferred by the enterprise in payment for services, works and finished products, use account 60. The organization posts account 71.
Consider an example: the Sigma company ordered raw materials for the production of products from the Athlete enterprise and paid 48,000 rubles in advance on 04.04.2015. 06/01/2015 "Athlete" delivered raw materials to the warehouse "Sigma".
In accounting with the customer, the following in advance should be reflected:
LLC "Inter" issued its employee Sviridov V.P. advance payment in the amount of 5,200 rubles for the purchase of stationery. Sviridov purchased an office for the amount of 4,850 rubles, and returned the balance of unused funds of 350 rubles to the cash desk of Inter LLC.
An invoice is one of the most common documents that are the basis for making an advance payment. It must have the following essentials:
The invoice must also indicate the quantity of products supplied, the scope of work and services, its cost, the rate and amount of VAT, as well as the deadline for the completion of work (delivery of goods).
AT last years many enterprises, in order to optimize their own workflow, refuse to use invoices, prescribing all the necessary information directly in the contract. By concluding an agreement, the contractor and the customer have the opportunity to describe in detail the terms for transferring the advance, the terms of delivery, as well as responsibility for their violation, which will allow the parties to minimize the likely risks.
Advance payments are considered to be payments in 100% or in part of the amount of the contract, made before the goods or services are actually received, work is performed, etc. Their primary goal is to ensure the fulfillment of obligations in terms of terms, volumes and quality.
Based on Article 487, paragraph 1 of the Civil Code of the Russian Federation, an advance payment, or advance payment, is considered to be payment that the supplier or seller received before he actually fulfilled his obligations.
As stated in Article 146 of the Tax Code of the Russian Federation, paragraph 1, the object of VAT is transactions for the sale of services, works or goods on the territory of Russia. Therefore, an organization that has received an advance payment in any amount to secure future obligations must calculate VAT on the amount received.
It must be remembered that not all advance payments without exception are subject to VAT.
1. VAT is not charged on advances made for transactions for which VAT is not legally provided for:
2. It is not mandatory to pay VAT on advances credited to the subsequent supply of services, goods or work, for which the manufacturing cycle lasts longer than six months (according to the list approved by Decree of the Government of the Russian Federation of July 28, 2006 No. 468) (Article 154, paragraph 1, paragraph 3; article 167, paragraph 13 of the Tax Code of the Russian Federation).
The seller, having received an advance payment (in part or for the entire amount of the contract), in accordance with Article 168, paragraph 3, clause 3 of the Tax Code of the Russian Federation, within 5 calendar days after the advance payment has been transferred, must draw up and issue an invoice to the customer. In a letter from the Ministry of Finance of the Russian Federation "On the application tax deductions on advance payments” No. 03-07-15/39 clarifies that an invoice may not be sent if the supplier has fulfilled its obligations before 5 days have passed from the moment the prepayment was received.
The VAT rate on advances is calculated by dividing tax rate on the tax base, which is increased by the same percentage of the tax rate. At a VAT rate of 10%, it is equal to 10/110, if a rate of 18% is used - 18/118 (Article 164 of the Tax Code of the Russian Federation, paragraph 4).
The invoice is prepared in 2 copies: the 1st is sent to the buyer, the 2nd is entered by the supplier in his sales book.
In May, Vesna LLC entered into an agreement with the purchasing enterprise Leto LLC for the supply of deck chairs for total amount RUB 94,400, including VAT.
Also in May, Vesna LLC receives an advance payment in the amount of 50% of the contract, or 47,200 rubles.
The VAT included in the amount of the advance to be paid to the budget is equal to:
RUB 47,200* 18% / 118% = RUB 7,200
These transactions are documented as follows:
During May:
When the goods are shipped, you should issue an invoice for the shipment, which is also noted in the sales book. After that, the invoice for the previously issued advance can be included in the purchase book.
The amount of VAT sent to the budget from the amount of the advance received can be included in the amount of the deduction after one of two events:
After fulfilling the obligations assumed and paying VAT on their amount, the supplier may accept for reimbursement the VAT paid earlier from the advance payment (Article 171 of the Tax Code of the Russian Federation, clause 8).
In July, Vesna shipped deck chairs to a buyer. From the proceeds received from the sale, VAT must be charged - 14,400 rubles. (94,400 rubles * 18% / 118%).
Now there is a reason to accept for reimbursement the amount of VAT transferred to the budget from the advance payment received from the customer (7,200 rubles).
In the declaration for the third quarter: "Spring" will show the remaining 7,200 rubles for payment to the budget. (14,400 - 7,200).
These transactions are processed by postings:
In the month of July:
When transferring VAT to the budget:
Dt 68, s / c "VAT settlements" - Kt 51 "Settlement account": 7,200 rubles. - transfer of VAT to the budget.
Vesna LLC must issue an invoice to the buyer - Leto LLC for 94,400 rubles. and be sure to mark it in the sales book.
The accountant notes the invoice issued for the amount of the advance payment (47,200 rubles) in the purchase book.
If the seller received an advance payment, but subsequently the contract with the buyer was terminated, the advance payment should be returned.
Suppose that in the situation discussed above, the contract for the supply of sun loungers between Vesna LLC and Leto LLC was terminated in July, but before that, Vesna LLC had already received an advance payment in May and transferred VAT from it. The VAT paid then to the budget is accepted for reimbursement.
This will require wiring:
In the month of May:
In the month of July:
The amount of VAT accrued and payable to the budget based on the results of the 3rd quarter will be reduced by the amount of VAT accepted for reimbursement based on the return of the advance received earlier.
The customer-taxpayer who transferred the advance payment is subject to deduction of the VAT amounts presented by the seller (Article 171, Clause 12 of the Tax Code of the Russian Federation). The buyer can make a VAT refund from the advances issued without waiting for the moment of sending the goods. The basis for the deduction are the documents contained in the Tax Code of the Russian Federation, in Article 172, paragraph 9:
The buyer notes the invoice in the purchase book.
The seller, after the release of the goods / products (fulfillment of obligations), issues an invoice in full for the entire amount of the contract to the customer. The customer takes this document into account in the purchase book. The invoice for the advance payment previously received must be recorded in the sales book at the same time.
The buyer accepts the entire amount of tax for reimbursement, but the VAT that he accepted for deduction from the advance payment must be restored in the same quarter (Article 170 of the Tax Code of the Russian Federation, paragraph 3, subparagraph 3).
In the same situation described in examples 1, 2, the buyer - Leto LLC - makes postings for himself:
After receiving the sun loungers:
The buyer can recover VAT even if the contract is terminated if the supplier returns the advance payment in the amount of which VAT was previously deductible.
A VAT payer, upon receipt of payment on account of the forthcoming supply of goods (performance of work, provision of services) subject to VAT, must calculate for payment VAT on the advance payment (clause 1, article 146, clause 1, article 154, clause 2, clause 1, article 167 of the Tax Code of the Russian Federation).
And when transferring an advance payment, the VAT payer has the right, subject to certain conditions, to accept VAT from the transferred payment for deduction (clause 12, article 171, clause 9, article 172 of the Tax Code of the Russian Federation).
How to reflect VAT on received and issued advances in the accounting and reporting of the seller and buyer, we will tell in our consultation.
When the buyer transfers an advance on account of VATable sales, the seller records the receipt of funds:
Debit of accounts 51 "Settlement accounts", 52 " Currency accounts”, 50 “Cashier”, etc. - Credit of account 62 “Settlements with buyers and customers”, sub-account “Advances received”
For the amount of VAT from the advance received transaction, the seller will generate the following transaction:
Debit of account 62, subaccount "Advances received" - Credit of account 68 "Calculations on taxes and fees", subaccount "VAT"
And how is VAT reflected in advances received in the balance sheet?
VAT on advances received in the 2018 balance sheet, for which reporting is prepared, reduces the amount of accounts payable reflected in the balance sheet liabilities ().
Let's show this with an example. Recall that in 2018 the main VAT rate was 18%.
Seller A received an advance payment from Buyer B in the amount of 65,000 rubles. (including VAT 18%).
The advance payment received and the accrued VAT in the amount of 9,915 (65,000 * 18/118) were recorded with Seller A as follows accounting records:
Debit of account 51 - Credit of account 62, sub-account "Advances received": 65,000
Debit account 62, subaccount "Advances received" - Credit account 68, subaccount "VAT": 9 915
For simplicity, let us assume that the other operations of the organization in reporting period did not have.
As a result of this transaction, the following amounts will be reflected in the balance sheet:
It will be possible to accept VAT deductible on the advance payment received upon return of the advance payment in case of termination or change in the terms of the contract or upon shipment of goods (performance of work, provision of services), on account of which the advance payment was received (clauses 5, 8, article 171, p .p.4, 6 article 172 of the Tax Code of the Russian Federation).
Then, when the advance VAT is accepted for deduction, an entry will be generated in the seller's accounting records:
Debit of account 68, subaccount "VAT" - Credit of account 62, subaccount "Advances received".
When transferring an advance, the buyer will reflect the following entry:
Debit of account 60 "Settlements with suppliers and contractors", subaccount "Advances issued" - Credit of accounts 51, 52, 50, etc.
On the basis of the received invoice for advance VAT, the buyer will make an entry in the accounting records:
Debit of account 19 "VAT on acquired values", subaccount "VAT on advances issued" - Credit of account 60, subaccount "Advances issued"
And will accept advance VAT for deduction:
Debit of account 68, subaccount "VAT" - Credit of account 19, subaccount "VAT on advances issued"
In the balance sheet, the amount of the advance payment issued is reflected minus the VAT accrued from it (Appendix to the letter of the Ministry of Finance dated 01/09/2013 No. 07-02-18 / 01, Letter of the Ministry of Finance dated 04/12/2013 No. 07-01-06 / 12203).
Let's show what was said on the above example of an economic situation.
The advance payment issued by the Buyer and the calculated VAT in the amount of 9,915 (65,000 * 18/118) are reflected in the following accounting entries:
Debit of account 60, sub-account "Advances issued" - Credit of account 51: 65,000
Debit of account 19, sub-account "VAT on advances issued" - Credit of account 60, sub-account "Advances issued": 9 915
As a result of this transaction, the following amounts will be reflected in the balance sheet of Buyer B:
The final balance of line 1230 is 65,000 (55,085 + 9,915).
These operations are not reflected in the liabilities of Buyer B's balance sheet.
Upon return of the advance payment issued (for example, upon termination of the contract) or upon receipt of goods (work performed, services rendered) from the supplier, the previously accepted VAT from the advance payment is subject to recovery (clause 3 clause 3 article 170 of the Tax Code of the Russian Federation):
Debit account 60, subaccount "Advances issued" - Credit account 68, subaccount "VAT"
Also, often accounting for VAT on advances received and issued is carried out on separate sub-accounts to account 76 “Settlements with various debtors and creditors”. This option is convenient in that it will be convenient for the accountant to see the total amount of advances received and issued on accounts 62 and 60, respectively, and not reduced by the amount of VAT.
