In case an operation, that has been entered at an earlier date, needs to be cancelled, the same VAT code that has been used for the initial operation needs to be entered with the minus sign (-). In this way the VAT is being rectified.
Instead of using the minus sign prior to the VAT code, it is also possible to use the specific VAT codes for discounts that have been configured in the VAT Codes table.
Example of a credit note on a sale
When a client finds a defect on a sold product, usually a credit note on his behalf is being issued. The credit note implies a decrease of the income and as a result a recovery of the VAT (Sales tax).
For example, we enter a sale amount of 12'000 including a 8% VAT. We then issue on the client's behalf a credit note of CHF 200.- for a product defect.
For a recovery of the VAT on the amount of the credit note, the VAT code of the sales has to be entered with a minus (-) sign.
Example of a credit note on a purchase
When we receive a credit note from a supplier, the same process as explained above applies: we use the same account codes but reverted, and we use the same VAT code with the minus (-) sign.
For example, we enter a purchase amount of 3'000 (invoice payment) including a 8% VAT. We then receive a credit note of CHF 300.- from our supplier for a product defect.