Value added tax is also paid on the received advances. But what about those situations when the counterparty of the company, due to various circumstances, insists on terminating the contract and returning the money? It is possible to recover VAT on advances if the contract under which the advance was received is terminated, the money is returned and the refund is reflected in the accounting records.
Instructions
Step 1
Draw up an act of reconciliation of settlements with the buyer in the prescribed form. The document must be signed by both parties.
Step 2
Execute the termination of the contract with the counterparty by drawing up an additional agreement to it, if the contract provides for this method of termination. If it contains provisions that allow it to be terminated unilaterally in certain cases, it is necessary to issue a written warning.
Step 3
If the contract is terminated at the initiative of the buyer, demand from him a letter containing a request to return the listed advance.
Step 4
If the contract is terminated on the initiative of the seller, draw up and send to the buyer a letter of intent to terminate the contract by agreement of the parties or a notice of refusal to perform the contract. Attach a signed statement of reconciliation of calculations to the document. Wait for a written response from the buyer, in which he must express his consent to terminate the contract.
Step 5
Issue and return the advance to the buyer. In this case, in the payment order, it is necessary to indicate the purpose of the payment in the appropriate field: "Return of the advance payment under the agreement". Register the invoice issued upon receipt of the advance payment in the purchase book.
Step 6
Make the necessary entries in accounting: - Debit of account 62 (subaccount "Advances received"), Credit of account 51 "Current account" - the return of the advance to the buyer is taken into account; - Debit of account 68 (subaccount "Calculations for VAT"), Credit of account 62 (subaccount "Advances received") - the amount of VAT paid to the budget was deducted from the advance payment on account of the delivery.
Step 7
To refund VAT from a listed advance, simply reflect in the reporting for the quarter in section 3 of the declaration for this tax the amount of the advance and the accrued VAT on line 070, and in line 130 enter the amount of tax deducted from the refund.
