Implementation of margin tax function
Opening balance
Recording transactions
VAT Calculation and Reporting
The marginal tax function can be used to calculate the marginal tax on the sale of used goods. This function cannot be used in the calculation of the marginal tax in the tourism sector.
The accounting calculates the profit margin based on the entered transactions and if applicable, the information will also be available for the VAT calculation on the TYVI file. If there are receivables left from the margin, they will be available for use in the next period.
Implementation of the margin tax function
- Activation of the function. First, ensure that the extended features of accounting are enabled. In Heeros, the company's data row displays a ++ icon at the end of the Accounting section. You can read more about activating the function for the company here.
- VAT codes. New VAT codes need to be created for margin calculation for the margin tax function. Read more about the VAT codes required for margin tax and their settings here.
- Accounts. Changes must be made to the accounting accounts settings for the margin tax function. Read more about the account settings required for the margin tax here.
- Opening balance. Record any unused margin tax receivable from previous months in the balance sheet through adjustment accounts if it has not yet been recorded there.
Opening balance
If there is unaccredited profit margin when implementing the margin tax feature, it must be entered as the opening balance on the margin tax receivable account, if no entry has been made in the balance sheet previously. If there is no margin tax receivable or it has already been recorded in the balance sheet, separate opening balances are not needed, and this step can be skipped.
Marginal tax receivables are recorded using the balance sheet receivables account and both sales and purchase adjustment accounts. The voucher type for the entry can be freely chosen; for example, it is possible to use the voucher type for opening balances or memo vouchers. The opening balance is recorded at the end of the previous period – in this example, the marginal tax feature is being implemented for the bookkeeping in January, so the balance was recorded in December (period 12).
Example
In the example, the uncorrected VAT of sales from the previous month is recorded to the sales correction account:
Sales 50,000.00 €, of which VAT 24% 9,677.42 €. In the previous month, only revenue of 50,000 € was recorded in the income statement.
Unadjusted VAT from the previous month's purchases is recorded to the correction account in the example:
Purchases 155,000.00 €, of which VAT 24% is 30,000.00 €. Last month, only the expense of 155,000 € was recorded in the income statement.
And this difference (= unreduced VAT receivable) is recorded in the balance sheet under margin tax receivables in account 1848.
30,000 € - 9,677.42 € = 20,322.58 €
No need to redo VAT calculations for the opening balance input month if it has already been done once. In the following month (in this case, January), the opening balance of €20,322.58 will appear on the VAT report as refundable margin from previous periods.
Recording transactions
Sales and purchases subject to margin tax are recorded in the accounting system using accounts designated for margin tax transactions. Automatic calculation occurs as part of the regular VAT calculation.
VAT calculation and reporting
The marginal tax period tax calculation is performed in connection with the period's VAT calculation. This calculation does not need to be considered separately; it happens automatically based on the settings of the accounts and VAT codes.
For transactions subject to marginal tax, the same additional information (voucher date, voucher type) as for other entries is created together with the VAT posting.
In the audit phase of the VAT calculation, the tax declaration shows new items Margin Tax 25,5 % and Margin Tax 10% under tax declaration codes 301 and 303. From the Margin Tax 25,5% and Margin Tax 10% items, it is possible to drill down to examine transactions subject to margin tax, profit margin, the amount of VAT, and any unused refundable margins from previous periods.
If the period only includes purchases subject to marginal tax or if purchases exceed the amount of sales, the breakdown can still be reviewed, but no figures related to this will be generated for the TYVI file and VAT declaration.
The VAT calculation is completed normally using the Continue button. In the context of VAT calculation, entries for adjusting accounts, margin tax receivables, and value-added tax liabilities are generated from transactions subject to margin tax, depending on the recorded transactions.
Note. If the VAT report is generated empty, please check that the next financial year and its periods have been established.