VAT is the consumer tax system used in the European Union as well as many other countries of which Switzerland.
It is a consumer tax, meaning that everything that you buy can be subject to VAT.
Somme products or services may be exempt (0%)
Different products may have different VAT Rates
Is is the final consumer that pays the complete tax, all companies may recover some or all that VAT that they pay when at their time, consuming goods and services.
In Switzerland, any company liable to VAT (see VAT conditions), must pay the amount of VAT due at the end of each quarter.
The company must produce a VAT statement, listing all sales and purchases that are subject to VAT during the quarter.
When a company books a Sale, the amount of VAT is calculated.
The customer will pay the Gross amount (Net amount + VAT).
The VAT perceived is booked to a VAT Payable account.
The net amount is booked to the Sales account.
When a company books a Purchase, the amount of VAT is calculated.
We will pay to the Supplier the Gross amount (Net amount + VAT).
The VAT included by the the Supplier on the Purchase Invoice is booked to a VAT Receivable account (unless only part of the VAT is deductible).
In some circumstances, only part of the Purchase Vat is deducible, the other part must be booked as a Cost (or included in the Purchase amount).
We know we are in this case, when the Tax Record’s field “Deductible VAT %” is not 100%.
The net amount is booked to the Purchase account.