How to make accounting entries for VAT addition and deduction
Under the condition of compliance with relevant policies and regulations, VAT can be added and deducted. How to prepare the added and deducted VAT accounting entries?
Accounting entries for VAT addition and deduction
1. Deductible additional deduction in the current period:
Debit: fixed assets/raw materials, etc
Taxes payable - VAT payable - input tax
Taxes payable - VAT payable - additional amount of input to be deducted
Credit: bank deposit
Transfer out of non deductible input tax:
Debit: production cost/sales expense, etc
Credit: taxes payable VAT payable Input tax transferred out
Taxes payable - VAT payable - additional amount of input to be deducted
2. Current input additional deduction amount deducts tax payable:
Debit: taxes payable - VAT payable - input plus deduction
Credit: taxes payable - VAT payable - additional amount of input to be deducted
The payable VAT is equal to the output tax minus the input tax. When the output tax of the current period is greater than the input tax of the current period, the difference between the two is a positive number, and the current tax needs to be paid; On the contrary, if the current input tax is greater than the current output tax, the difference between the two is negative, then the current tax will not be paid, and will be used as the retained tax to be offset in the next period.
When the input tax is greater than the output tax of the current period, the retained tax amount is formed:
Debit: taxes payable - unpaid VAT
Credit: taxes payable - VAT payable (transfer out of overpaid VAT)
What is the tax payable?
Taxes payable refer to various taxes payable by enterprises based on the business income and profits achieved within a certain period of time and in accordance with the provisions of the current tax law, using a certain tax calculation method, including value-added tax, consumption tax, enterprise income tax, resource tax, land value-added tax, urban maintenance and construction tax, property tax, land use tax, vehicle and vessel tax Education surcharges and other taxes, as well as individual income taxes collected and paid by enterprises before they are handed over to the state.