How to return VAT on advances

The value added tax is paid and also received advances. But what about in situations when the counterparty of the firm in different circumstances insists on termination of the contract and refund? To return the VAT from the advances possible if the contract for which was received in advance, is dissolved, the money refunded and the refund is reflected in the accounting records.

Instruction

Make a reconciliation report with the buyer in the prescribed form. The document must be signed by both parties.

Arrange with a counterparty, termination of the contract, amounting to the supplementary agreement thereto, if the contract provides for this method of termination. If it includes a provision allowing it to terminate in certain cases unilaterally, it is necessary to design a written warning.

If the contract is terminated at the initiative of the buyer, demand from him a letter containing a request to return the listed advance payment.

If the contract is terminated at the initiative of the seller, make and send to the buyer a letter of intent to terminate the contract by agreement of the parties or a notice of refusal from the contract. Attach to the document signed, the reconciliation act of accounts. Wait for the buyer a written response in which he should Express his consent to the termination of the contract.

Decorate and make a refund to the buyer. In this case the payment order should be entered in the appropriate field of the payment purpose: "the return of the advance payment under the contract." Register exhibited when receiving the advance payment invoice in the purchase Ledger.

Make in accounting required Postings: the Debit of account 62 (the subaccount "advance payments received"), the Credit of account 51 "Settlement account" - the account of the refund to the buyer;- the Debit of account 68 (the subaccount "Calculations under the VAT") Credit of account 62 (the subaccount "advance payments received") - deducted VATpaid to the budget with an advance on a delivery.

For a refund of VAT from the listed advance just reflect in the financial statements for the quarter in section 3 of the Declaration on this tax the amount of the advance and accrued VAT on a line 070, and the line 130 enter the amount of deductible tax saswata.

Note

The value added tax from advance can be returned, provided that since the rejection of goods, works or services was not more than one year.

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