Hi I have a question regarding the accounting entries for CIS and the implications on the VAT return when using cash accounting. From what I understand you post a creditnote to the customer account to reflect the CIS deducted and debit CIS deduction (2212 in SAGE). What vat code do you use for this and should it be reflected in the VAT return? I assume you still need to declare output tax as the full amount but because it's cash accounting the vat return is being calculated on cash received which is lower due to the CIS deduction. If anyone out there understands CIS and the journal entries you need to do and which VAT codes you use, it would be very much appreciated. thanks
Hi I have a question regarding the accounting entries for CIS and the implications on the VAT return when using cash accounting. From what I understand you post a creditnote to the customer account to reflect the CIS deducted and debit CIS deduction (2212 in SAGE). What vat code do you use for this and should it be reflected in the VAT return? I assume you still need to declare output tax as the full amount but because it's cash accounting the vat return is being calculated on cash received which is lower due to the CIS deduction. If anyone out there understands CIS and the journal entries you need to do and which VAT codes you use, it would be very much appreciated. thanks
Hello,
The correct approach would be to post a credit note for the CIS deduction using the VAT Code T9 to account 2212.
Make sure the date of the credit note is the same as when payment is received.
By doing this, you should ensure that the full VAT amount of the invoice is included on the VAT Return.
