Transitional VAT accounts

Disclaimer

All screenshots in the article were taken in the Dutch version of Yuki.

This article will briefly explain when the transitional VAT accounts are updated and how the balance of all VAT accounts can be explained.

Each btw-type has a corresponding GL account. In Yuki the following types/accounts are used:

• VAT of supplies/services taxed at high rate
• VAT of supplies/services taxed at low rate
• VAT of supplies/services taxed at other rates except 0%
• VAT concerning private use
• VAT of supplies/services taxed at 0% or whereof VAT is not levied to you
• Supplies/services whereof the levy of VAT is reverse charged to you
• Supplies to countries outside the EU (exports)
• Supplies to countries within the EU
• Supplies to/services in countries within the EU
• Installation/distance sales within the EU 
• Supplies from countries outside the EU (imports)
• Acquisitions from countries within the EU
• VAT Input tax
• Reduction according to the 'kleineondernemersregeling (KOR)'
• Exempt from VAT.

Create VAT transactions

Whenever an invoice or transaction is processed in which VAT is applicable that has to be declared in the country itself then a general ledger transaction will be created on one or sometimes two of these accounts. That transaction also records in which VAT return that transaction is declared.

Which VAT return applies is automatically determined, as a rule it is the VAT accounting period within which the invoice date or transaction date falls. When this VAT return has been filed already (or closed historically) then the next draft VAT return will be chosen.

So when creating the transactions the transitional VAT accounts will be updated.

Closed VAT return

When a VAT return is closed (so after sending it to and confirmation by the tax authorities) the balance of all transactions in that VAT return (so the balance of the VAT return) will be posted to the '24000 Current account VAT' ledger account.

This doesn't happen, as sometimes expected, by recording a counterpart entry for each VAT account and then record the balance in the '24000 Belastingschulden btw' ledger account. Yuki has chosen to do this via a transitional VAT account. That means that the balance of each transitional VAT account will accumulate during the year.

So when journalising the VAT return, for example, you get the following entry:

When there are no invoices or entries that are recorded in another VAT accounting period then the total of all transitional VAT accounts is zero. However, if there are invoices that are declared in another VAT accounting period than they are recorded then a balance wil still remain after filing the VAT return. So that balance is the total of all entries that are not yet declared. 

Reset transitional VAT accounts to zero

At the end of the financial year, after everything concerning that financial year is recorded and checked the transitional VAT accounts have to be reset to zero. That happens with a year-end entry that posts the balance of each transitional VAT account to the '24000 Current account VAT' ledger account.

When the administration is blocked (so not closed) for that financial year and you open the ledger card of a transitional VAT account for the entire year then an additional [0] Record balance to 0 button will be shown for users with the 'Portal back office controller' or 'Back office controller' role in the domain or the 'External accountant' role. With this button you can simply initiate the year-end entry that is referred to above.