Cash method - introduction
Referring to Art. 21 sec. 1 of the Act on VAT, a small taxpayer* may settle VAT with a certain method. It consists in the fact that the tax obligation arises on the day when all or part of the invoice is paid, no later than the ninetieth day from the date of delivery of the goods or performance of the service (with certain reservations).
In order to settle account with the cash method, the taxpayer must notify the head of the competent tax office by the end of the month preceding the period for which the taxpayer will use this method.
*a small taxpayer is one whose sales value (including the amount of VAT) did not exceed an amount expressed in PLN corresponding to the equivalent of EUR 1,200,000 in the previous tax year.
How to configure the cash method
To start saving purchase and sales invoices to the VAT register according to the cash method, you need to enable the appropriate in the Company Setup.
Additionally, the program allows you to set a reference string for documents (journal items) which are created when the invoice is entered into the VAT inquiry (i.e. when paying for the invoice). It applies to purchase invoices.
Purchase invoice by cash method
When entering a purchase invoice, you can tick that it must be entered according to the cash method. After selecting this checkbox, the VAT date field (if was checked) disappears.
The invoice entered this way will not be entered into the VAT register, but the corresponding VAT posting will be created with the date of the invoice. If the option to post VAT to the deferred tax account is enabled, the program does not save the VAT amount to the VAT account, but to the Deferred Input Tax Account set in the System and General GL Setup.
The purchase invoice will be automatically saved to the VAT register after the payment is allocated. This can be done while entering the payment or later - when assigning the payment to the invoice.
Transfer of Input VAT
If the VAT has been posted to the Deferred Input Tax Account while entering the invoice, then the program will automatically create a document of the Journal items type, which will transfer the tax to the appropriate VAT account.
You can check the preview of the VAT transfer documents created this way on the purchase invoice posting preview screen.
When entering a purchase invoice, you can tick that it must be entered according to the cash method. After selecting this checkbox, the VAT date field (if was checked) disappears.
Sales invoice by cash method
Similarly to the purchase invoice, the program allows you to issue sales invoices using the cash method.
After paying the invoice, the relevant entry appears in the VAT register with the payment date.