DESKTOP EDITION CLOUD EDITION SERVER EDITION GUIDES FORUM

Purchases with partially recoverable VAT


#1

I recently started as a freelancer and I’m using Manager desktop edition to keep track of my accounts. Thank you for a great product!

In Belgium, the VAT is not 100% recoverable for some purchases. Is it possible to specify this somehow on a purchase invoice? If I need to handle this using a journal entry, can you explain how to do this?


#2

Can you specify some example where VAT on purchase is not 100% recoverable?

Generally in this case you should split the transaction (use Split button) where amount subject to VAT has relevant tax code set while amount not subject to VAT has no tax code set.


#3

In this particular case, this concerns a printer. In general, only 75% of VAT can be recovered for purchases that are also privately used (if professional use is at least 50%) such as cell phones, laptops, desktop computers and camera’s.

I’ve now split the transaction: one with a quantity 0,75 and the other 0,25. (Un)fortunately, I also got a cash-back on the printer, so I’ve had to do the same for the corresponding journal entry. The VAT payable amount now agrees with what my accountant calculated. Great!

Of course, it would be nice if this were supported by Manager, perhaps as a custom VAT rate which would even allow setting the recoverable percentage on a per-item basis (which is necessary if professional use is < 50%). If you can find the time… :slight_smile:


#4

The idea is that eventually greater support for private usage will be implemented. For example you will be able to set that 50% of expenses posted to Telephone and internet account in specified period are private usage. Then Manager will automatically do the split for you on account-level rather than you doing this in every transaction manually, especially when private usage percentage is always the same (think of regular payments such as rent, electricity, telephone etc.)