• From: Oman, Muscat
  • Registered: 10/10/2020
  • Posts: 39

Topic: How to deal with Vat Payable account and Vat receivable Account

Hi

I have recently registered for VAT and enabled vat in the system, at the end of the fourth period of the last year 2021 , I have forwarded the amount of 0.725 to the government, based on the following records:
2180   Vat Payable account  = 8.925
1220   Vat receivable Account =8.200

My question is, What is the next step do I need to do in the system to record the payment of the amount  0.725 which is paid from my bank account.

do I need to do any transaction related to the "Vat Payable account and Vat receivable Account " as both accounts still show the above values?

Please advice.

  • rafat
  • Senior Member
  • Offline
  • From: UAE, Dubai
  • Registered: 11/28/2017
  • Posts: 540

Re: How to deal with Vat Payable account and Vat receivable Account

Hi,

https://www.frontaccounting.com/fawiki/index.php?n=Main.TaxSystem

Under Using the Tax System

It has very helpful info on how to book these figures.

rafat's Website

  • From: Oman, Muscat
  • Registered: 10/10/2020
  • Posts: 39

Re: How to deal with Vat Payable account and Vat receivable Account

Dear Rafat

Thank you for your reply and sorry for the delay

I've seen the page you referenced, but I'm still not sure if my action is correct.

As long as I paid the tax authority, I did the following process:
I have Debited the "Vat Payable account" and Credited the "bank account" with the same paid amount.

If my transaction is correct do I need to do anything with the accounts "Vat Payable account" & "Vat Receivable account" or do I just keep them as is.

4 Reply by rafat (edited by rafat 01/15/2022 01:55:44 pm)

  • rafat
  • Senior Member
  • Offline
  • From: UAE, Dubai
  • Registered: 11/28/2017
  • Posts: 540

Re: How to deal with Vat Payable account and Vat receivable Account

Hi @said.omn

The wiki clearly recommends that you have a third account called Accrued Tax (or similar) in order to consolidate  your taxes.
So basically at the end of your tax period you need to zero your tax accounts by counter booking them in the accrued account and then you pay or deposit from the Accrued Account.  To make it simple I used your two accounts and I created a third account (2190 Accrued Tax). I used your figures to demonstrate how I would do it.

Take a look at the attached file.

Regards..

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rafat's Website

  • From: Oman, Muscat
  • Registered: 10/10/2020
  • Posts: 39

Re: How to deal with Vat Payable account and Vat receivable Account

Dear Rafat

I thank you for your cooperation, I have implemented what you indicated and now I feel comfortable, everything is going according to logic.
In fact, I really appreciate your great effort to help, thank you very much.