Bahrain

Done. Here are the most relevant screenshots

Note the following:

  1. Item 1 Tax Amount is more than 5% of Taxable Sales. This is the breakdown of it:

  2. The Domestic RCM has been reverse signed in outputs, this made it impossible to reverse sign it in inputs because they have the same ID and somehow this messed something up. Please check it out.

  3. The total sales is off due to what we’ve discussed earlier. Should I just remove the total sales and total purchase amount and leave the totals showing tax amounts only?

Also,

Sales exceptions removed. I just kept a note at the bottom.

Also also,

I missed this before, but if you miss accounting RCM outputs, your apportionment becomes larger and you end up overpaying the government.

Suppose we have made 10,000 taxable sales and 10,000 exempt sales, this means that you need to apportion (write-off) 50% of your claims, that is [ 10,000 / (10,000 + 10,000) ] . Now suppose you also have 5,000 in RCM purchases, this would lower your apportionment to 40% which is [ 10,000 / (10,000 + 10,000 + 5,000) ].

The idea is that when you import you must pretend to have generated the supplies and sold it to yourself, if that makes any sense.

This is not what I meant. I meant to enter random figures into government submission form. Not in Manager.

Aha, That’s not possible. You only get to see the form when you have a pending submission, which I don’t.

OK. Because as per the screenshot of government form, we can’t have VAT Amount for Standard rated sales anything but 5% of Amount.

And then we can’t have VAT Amount on Sales subject to domestic reverse charge mechanism at all since government submission form does not even have this field.

I suspect that when you enter random figures into government form, you might see that Reverse charged VAT amounts in purchase section will not flow into Net VAT due (or reclaimed) at all. This is the only way it can “balance out”.

There is a VAT amount for that. Looking back, I think the screenshot is outdated, I think it was from before VAT adoption.

@lubos It turns out you were right, there’s no amount for that field. The field is zero rated sales made to someone who can apply the domestic RCM.

After further digging – as a summary, the RCM you must sell the import back to yourself and record both the output and input VAT. The domestic RCM is when you apply RCM on domestic purchases. Both of these will have the output portion fully consolidated with standard rated sales. This means that:

  • VAT/I - Domestic RCM and VAT/I Amount - Domestic RCM must be reported under item 1.

The catch with domestic RCM is that the buyer gets a certificate that he shares with domestic suppliers so that they apply a special zero rate instead of standard rate. This means that:

  • for item 3 we need a new zero VAT rate and a new zero category to report zero rated sales made to Domestic RCM customers, let’s call that VAT/O - Domestic RCM Sales.

FYR, you can check out the following guides:

  1. Reverse charge output treatment sec.2.2.2 pg.17
  2. Specifics on domestic reverse charge sec.7.3.3 pg.58

OK, so for VAT Amount on Standard rated sales, it should be this:

image

Do you agree?

I do not have a solution for Amount so just leave it like this:

image

If you can update the rest of report transformation so it’s consistent with tax authority form, all that will be left is Amount for Standard rated sales which I will deal with myself.

Sure and …

I think I have a workaround, possibly a solution.

There is now new way to reverse sign in cells. Simply select Reverse signs category along with your reporting categories. No need to handle this with javascript anymore.

image

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Will this work for individual components or for the entire cell?

Entire cell only. This is not solving anything we’ve discussed, just making it possible to omit javascript.

Please check the new transformation named “VAT Return Form - Modified Layout” and share your thoughts.

That’s a great progress. I think some javascript will be needed to handle Standard rated sales issue and your solution is good. However things like removing drilling-down ability could be solved easier with special marker which I could implement (similar how Reverse signs already is). That would reduce amount of javascript.

One question. Why do we need:

And

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Because otherwise we will have to have 1 tax code for the adjustment of each and every line item, plus a tax code per each of the standard rated purchase lines. That would be 15 adjustment tax codes which is 12 more than we currently have. I thought that was too much and so did @danowagroup.

But why do we need to have tax codes for adjustments at all? It doesn’t look like the tax authority form has provision for that.

As far as I can see, when you issue credit note, it’s not really an adjustment, it’s negative sale.

The entire second column here :point_down: is about adjustment and apportionment:

According to the laws and regulations. Suppose we issued an invoice on 30-Sep which is the end of Q3, later in October there’s been a goods return. The credit note issued in Q4 for an invoice issued in Q3 is regarded as an adjustment in Q4 VAT return.

I forgot about that second column. OK, we need actually tax codes to cover each field.

Yeah, it sucks but that’s the correct way.

If some tax codes are unusual, we should make them Inactive in localization so they are not seen in dropdowns by default. We should make only the most common tax codes active.

Documentation for the country will be automatically generated out of definitions in localization so that’s another reason to make it all proper.

You’re right. So I will create an adjustment code to each cell and then inactivate all of them except for those for items 1 and 8.

But the ids for the totals are going to span multiple pages though.

And since you liked the modified layout I will keep it, but should I delete or inactivate the previous one?

Just delete.

@Ealfardan How I use Reverse Signs?!