What is input VAT

The value added tax has an important place in the budget revenues, and therefore is constantly under the scrutiny of tax authorities. Aerobatics for the chief accountant is the ability to correctly calculate and optimize this tax.

Read more about input VAT

Input VAT is the VAT that you paid to the vendor for payment of goods or services. At the conclusion of the contract, as a rule, immediately raises the question of the VAT works contractor or not. Firms that are themselves on the common system of taxation more profitable to work with the same suppliers, as input VAT can be deducted from the amount of tax laid to pay to the government. Input VAT, the supplier shall notify the purchaser in addition to the cost of goods and services. Organizations and individual entrepreneurs who work without a VAT tend to have a lower price for the same goods and services.

For tax purposes, input VAT can be used as follows:

1. To receive reimbursement. At the end of the reporting period (one quarter) taxed, exhibited to paying customers during the period (shipment), and it is deducted from the VAT already paid or accepted for accounting from suppliers. The difference is paid to the budget. If input VAT is greater than output VAT, it can be returned from the budget.
2. To take into account the cost of goods or services (regulated by paragraph 2, article 170 of the tax code).
3. To include in the costs that reduce the profit tax. (governed by section 5, article 170 of the tax code).

Documentary evidence of input VAT

The document, which confirms the input VAT is the invoice. This document should be addressed specifically to the buyer, for this "Buyer" must use the correct name and all details. The invoice is the first that requested during a tax audit, so the document needs to be perfect. There are various guidelines on how to issue an invoice. Empty fields or sections with errors, misspellings are not allowed. The document is not validated and the VAT amount will not be credited and this will lead to high fines and arrears. Fraud VAT possible criminal liability of officials.

When applying the simplified system of taxation paid to suppliers VAT can be written off to expenses upon presentation of supporting documents.

Reporting on VAT

The value added tax you need to report. The Declaration is dealt once per quarter – up to the 20th day of the month following the quarter. From 1 January 2014 this document send to the tax office only in electronic form. At the same time you must calculate and pay the advance payment of VAT.

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