Applying Reverse VAT: Generated Transactions
As you process purchases with a reverse VAT, you create and process an AP bill. To update the vendor balance and calculate a reverse VAT that should be paid to and later claimed from the tax agency, the system generates the GL transactions described in the following section.
Transaction Generated for an AP Bill
When you create and release an AP bill with a reverse VAT applied, the system generates the following general ledger transaction:
| Account | Source of Account | Debit | Credit |
|---|---|---|---|
| Expense account | The expense account specified for the document line on the Bills and Adjustments (AP301000) form | Amount | 0.00 |
| Accounts Payable account | The AP account of the vendor specified on the Vendors (AP303000) form | 0.00 | Amount |
| Tax Claimable account | The Tax Claimable account specified for the reverse VAT of the Input type on the Taxes (TX205000) form | Tax amount | 0.00 |
| Tax Payable account | The Tax Payable account specified for the general VAT of the Output type on the Taxes form | 0.00 | Tax amount |
You can view the reference number of the GL batch on the Financial tab of the Bills and Adjustments form.