Value added tax

Requirement

Most countries in the world have implemented VAT as the most common tax system for consumption.

Ingoing VAT is not always to be deductible immediately. It depends on how the purchase has been used, if it has been used for import or export, if the fixed asset has been activated or not.

At period or quarter end, the user decides whether the VAT amount on each supplier invoice is deductible or not. If the VAT amount is deductible, then the amount is transferred from the suspense account to VAT to be deducted. The remaining part can be used in the next period, or written off.

M3 solution

The calculation, accounting, reporting, and reconciliation of value added tax is supported by generic functionality in M3. This process is supported through VAT report templates. These templates are user defined and used in VAT proposals, reconciliation, and report functions. Reports and electronic messages are based on these templates.

Beside ordinary VAT handling, M3 supports the Russia-specific additional pair of VAT accounting transactions with suspense account/VAT to budget to keep track of how much of the VAT per invoice that has been paid.

Configuration guidelines

Program ID Program name Description or comment
MNS100/G Settings. Division

Specify this information:

Tax method
Specify 1.
VAT reg number
Specify INN.
Country code
Specify RU.
Local currency code
Specify RUB.
CRS030 VAT Codes. Open Select the Consider VAT override check box.
CRS750/F Settings – General Ledger

Specify this information:

VAT chk online
Select this check box.
Accept VAT dev
Specify 0,00.
VAT printout
Specify 3 or 4; for the delivery date.
Invoice class
Select this check box.
Split curr var
Select this check box.
VAT reconc mtd
Specify 1-Storno or 2 Reverse.
CRS031 VAT Rates. Open Set the VAT rates by date, country, and area or state.
CRS045 Country Codes. Open For the ISO ccountry code RU, set the VAT reporting currency to RUB.
CRS395 Accounting Rules. Set
CRS610 Customer Master. Open
CRS620 Supplier Master. Open
CRS630 Accounting Identity. Open
MMS002/I Item Warehouse. Open Set the VAT code.
TXS020 VAT Exemption. Open Optional