Accounting & The Calculation Of VAT
Course Code: FA09
►Course Objective
- List major terms of VAT such as a taxable person, input VAT, output VAT and exempt supplies
- Recognize the effect of VAT adoption on their company’s financial statements
- Explain how to account for VAT on purchase and sales of goods or services whether the entity is registered in VAT or not
- Use the company’s trial balance to fill up a VAT return
- Formulate a preliminary assessment of impact of VAT adoption on operations and accounts
- Assess impact of VAT on selected industries
►Target Audience
- Staff accountants
- senior accountants
- chief accountants
- accounting managers
- controllers
- internal auditors
- tax consultants
- tax preparers
- other professionals in the accounting and finance functions
Course Outline
:Day 1
Introduction and basic mechanics of VAT
- Basic mechanics of VAT
- Definition of VAT
- How VAT works: input and output VAT calculations
- Persons and entities subject to VAT
- Different types of supply
- Taxable supplies within the scope of VAT: goods and services
- Exempt supplies outside the scope of VAT
- Zero-rated supplies
- Deemed supplies
Day 2:
- Place of supply: local versus export
- VAT on sales charged on delivery, invoice or payment date
- When to record and recover VAT on goods and services received
- Local delivery
- Imported goods and services
- Taxable amount: which amount is subject to VAT
- Discounts and free goods treatment
- The party liable to pay VAT
Day 3:
Accounting for VAT
- Issuing the VAT invoice
- What does a VAT invoice look like
- Contents of an invoice
- Difference between cash business and sales on account
- VAT records and documentation to be maintained
- Accounting entries for VAT
- Local purchases of goods and services
- Imported goods and services
- VAT on expenses
- Self-supply of goods and services
Day 4:
- VAT on sales
- Discounts provided to customers
- Interest on late customers’ payments
- VAT entries for bad debts write-offs
- VAT entries for down-payments
- Treatment of damaged goods
- VAT on leases taken: operating and finance leases
- Purchases and sales of fixed asset
- Entities providing non-vatable activities
- Trial balance accounts needed to complete a VAT return
- Expected format of a VAT return
Day 5:
Issues to be considered and addressed by industry
- Retail
- Automotive
- Meetings, incentives, conferences and events
- Financial services and insurance
- Real estate and construction
- Tourism
- Oil and gas
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