How do I enter an expense which is only partially tax-deductible? e.g. I can deduct only 40% of the 22% VAT on gas.

Forum|Forum|6 years ago
September 26, 2019
4 replies
16 views

Let's say I'm buying gas. In Italy that's taxed with a 22% VAT, but only 40% of that is deductible. I need the full 22% to show in the invoice. When I file my taxes, in the total amount of deductible taxes, I need to consider only the deductible percentage instead. So 40% of the 22% VAT.

QuickBooks Online - International

Rajanikanth

Hi, benedetti

When creating a Bill / Expense enter the 40% of VAT and balance amount as unclaimed VAT item/account

Comment back for further clarifications / to discuss.

Rajanikanth

Benedetti, it will work correctly Unclaimed VAT/Disallowed VAT expenses you need to create an item and an account, link the Item to the account and select whenever you are restricted or disallowed to claim VAT this type of expenses in most countries not an allowable expenditure for the purpose to calculating corporate income tax so attache the relevant docs will be useful for tax consultant.

Yes you need to manually enter the 40% VAT below the subtotal in the tax field and balance 60% as Unclaimed VAT/Disallowed VAT expenses
Note: you do not need a calculator just use the amount field as calculator e.g in the tax amount field
assume 100 is the total VAT, 100*40% QBO will calculate the amount.

For more details with screenshots, I need to know the QBO country version.
Feel free to discuss/ for more clarifications.

Graceman

Create new tax codes for the recoverable & unrecoverable post the unrecoverable to vat unrecoverable new expense account. Now create a new group vat rate for the full taxable amount and add in the two new vat codes recoverable & unrecoverable.

Now apply the group rate the unrecoverable amount gets posted to expense and the recoverable get posted to the vat agency.

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