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Use

There are several points at which the Deferred Tax Transfer program can recognize a bill of exchange as a payment:

  • On the bill’s due date, irrespective of whether the bill has been paid

  • On full payment of the bill (and not before)

  • On every partial payment

Prerequisites

You have made the settings in Customizing for Financial Accounting (FI), by choosing General Ledger Accounting → Business Transactions → Closing → Report → Sales/Purchases Tax Returns → Deferred Taxes → Specify When Bills of Exchange Are Recognized .

Example

On 5 January, you invoice a customer for EUR 840,000, including VAT at EUR 140,000. The customer pays you by bill of exchange, due on 31 May.

  • Assume that you recognize the payment on the bill’s due date

    The first time you run the Deferred Tax Transfer program after 31 May, the program recognizes the payment and transfers the tax, no matter whether the customer has paid.

  • Assume that you recognize the payment on full payment of the bill

    On 12 February, the customer makes a first payment of EUR 360,000. You run the Deferred Tax Transfer program on 28 February, but it does not recognize the payment, since the bill must be paid in full.

    On 28 May, the customer pays the outstanding EUR 480,000. When you run the Deferred TaxTransfer program on 31 May, it recognizes the payment and transfers the VAT accordingly.

  • Assume that you recognize all partial payments on the bill

    On 12 February, the customer makes a first payment of EUR 360,000. This is equivalent to EUR 300,000 plus EUR 60,000 VAT. When you run the Deferred Tax Transfer program, it transfers EUR 60,000 VAT from the deferred tax account to the output VAT account.

    On 28 May, the customer pays the outstanding EUR 480,000. You can now transfer the remaining EUR 80,000 of VAT.