Workshop on Accounting for VAT

Program Overview:

Value Added Tax (VAT) has become part of the accounting system of every organization as required by law in most countries of the world. Organizations all over must be prepared by upgrading the skills of their accounting staff to fully understand and properly account for the VAT. From invoicing to recording entries and preparing VAT return forms, this course provides an overview of the accounting treatment of the VAT according to the various types of goods and services. Additionally, when compiled from multiple sources the possible VAT treatments, challenges faced and questions asked by industry, in order to help businesses, understand the likely impact from adopting VAT on their operational and financial accounts.

For Whom:

This program is designed for accountants, senior accountants, chief accountants, accounting managers, controllers, internal auditors, tax consultants, tax preparers and other professionals in the accounting and finance functions

Learning Objectives:

At the end of the program, participants will be able to:

• account for VAT on purchase and sales of goods or services whether the entity is registered in VAT or not;
• use the company’s trial balance to fill up a VAT return;
• formulate a preliminary assessment of impact of VAT adoption on operations and accounts;
• evaluate their personal accounting skills and drivers of behavior;
• ensure VAT records and documentation are maintained; and
• apply acquired skills on VAT compliance for their organizations.

Course Outline:

Day 1: The mechanics of a VAT system

• Issuing the VAT invoice
• What does a VAT invoice look like?
• Contents of an invoice
• Difference between cash business and sales on account
• VAT records and documentation to be maintained
• Classification of goods and services and VAT rates (standard rated, zero rated and exempt.
• How is a transaction valued for VAT purposes?
• Essential knowledge on VAT compliance
• Impact on Industry
• Pricing strategies

Day 2

• Accounting entries for VAT
• Local purchases of goods and services
• Imported goods and services
• VAT on expenses
• Self-supply of goods and services
• VAT on sales
• Discounts provided to customers
• Returned goods
• Exchanged goods

Day 3

• Interest on late customers’ payments
• VAT entries for bad debts write-offs
• VAT entries for down-payments
• Treatment of damaged goods
• Sale on consignment:
  • treatment for consignee and consignor
• VAT on leases: operating and finance leases
• Purchases and sales of fixed asset
• Entities providing non-vatable activities
• Trial balance accounts needed to complete a

VAT return

• Expected format of a VAT return

Training Methodology

Methodology: Lectures, discussions, exercises, case studies, audio-visual aids will be used to reinforce these teaching/learning methods.