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Value Added Tax

Helipolise for import & export Co. had various transactions in January involving importing, purchasing local goods, selling goods, and paying expenses. The company learned that customs repriced an imported invoice higher and had a VAT credit balance carried over. To calculate the VAT: 1) VAT on inputs was calculated for imported goods, local purchases, and expenses totaling EGP 260,652 2) VAT on outputs from sales totaled EGP 158,185 3) VAT due was the output VAT minus input VAT, resulting in a credit of EGP -75467 4) Since the company had a credit balance carried over, no VAT was required to be paid.

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Marwan Hamdy
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30 views8 pages

Value Added Tax

Helipolise for import & export Co. had various transactions in January involving importing, purchasing local goods, selling goods, and paying expenses. The company learned that customs repriced an imported invoice higher and had a VAT credit balance carried over. To calculate the VAT: 1) VAT on inputs was calculated for imported goods, local purchases, and expenses totaling EGP 260,652 2) VAT on outputs from sales totaled EGP 158,185 3) VAT due was the output VAT minus input VAT, resulting in a credit of EGP -75467 4) Since the company had a credit balance carried over, no VAT was required to be paid.

Uploaded by

Marwan Hamdy
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Helipolise for import & export Co.

has the following transactions:


Jan. 2 - Imported goods from Italy, the invoice value of goods “CIF” is 54000 EURO . custom duty is
20% of accepted value, shipping and handling expenses 2800 EGP, containers inspection
expenses 875 EGP, other expenses on custom area 1300 EGP. transportation expense
1800EGP.
Jan. 8 – Sold goods Value of 890000 EGP. Invoice No.19815.
Jan.13 - Paid the following expenses:
- Stationary supported by invoice value of 4500 EGP.
- Maintenance supported by invoice value of 18088 EGP
- Ink for printers not supported by invoice value of 2850EGP.
Jan. 15 – Purchased local goods from AL NASR Co. by invoice No.158 Value of 614818 EGP.
Jan.16 – Paid an auditing fees through invoice no.4112 value of 20000 EGP.
Jan.22 – Sold Goods value of 485000 EGP. Invoice No.19816.
Jan.25 – Export goods to Iraq value of 20000 EURO. Invoice No.19817.

If you learn that:


- Custom did not accept the value of imported invoice and repricing it by 60000EURO.
- Euro exchange rate is 1 EURO = 19.75 EGP.
- The company has a Credit foreword value added tax from the last month value of
1138477 EGP.
Required :
A) Compute value added tax for inputs.
B) Compute value added tax for output.
C) Value added tax due.
D) Value added tax should be paid ( if found ).
Solution :

A) Value added tax for inputs for :

- Goods imported
Value of acceptable from custom × euro exchange rate = Value of acceptable from custom EGP.
60000 Euro × 19.75 = 1185000 EGP.
Custom Duty (Value of acceptable from custom EGP× 20% )
1185000 × 20% = 237000 EGP.
shipping and handling expenses 2800 EGP.
containers inspection expenses 875 EGP.
other expenses on custom area 1300 EGP.
-----------------
Cost of goods imported 1426975 EGP.

Value added tax 14% 199776.5 EGP

- Local Goods purchased


Local goods purchased value = 614818 / 1.14 = 544086
Value added tax for local goods purchased =
544086 × 14% = 70731 EGP

- Value added tax for Commodity :


Stationary supported by invoice = 4500/1.14= 3982
Value added tax for Stationary = 3982 × 14% = 517 EGP
Ink for printers ( not supported by invoice ) = 0

- Value added tax for Services :


Maintenance supported by invoice = 18088/1.14=16007
Value added tax for Maintenance = 16007× 14% = 2080 EGP
Value added tax for inputs

Inputs VAT Total value Imported Loca Inputs


l
256754 1975043 1426975 548068 commodity

3898 34188 34188 Services


Machin. & Equip.
260652 2009231 1426975 582256 Total
+
Adjustments
260652 Inputs VAT

B ) Value added tax for outputs

Goods Sold =
890000/ 1.14 =787610 EGP
485000/1.14 = 429203 EGP
Value added tax for Goods sold = 1216813 × 14 % = 158185 EGP.
Export Goods = 20000× 19.75= 395000EGP
Value added tax for export goods= 395000× 0 % = 0 EGP.
VAT Total value Services Commodity Tax Rate
158185 1216813 1216813 14 %

0 395000 395000 Zero


Exmp
..
Total
+Adjustments

158185 VAT on outputs


c) Value Added tax Due
VAT for outputs – VAT for inputs = -75467 EGP

D value added tax should be paid


Dr. / Cr. Credit balance VAT Due VAT on VAT on
outputs
forward Inputs

- 1213944 -1138477 -75467 260652 158185

Because the company has :


- a credit balance forwarded.
- A credit VAT due .
so there is no VAT should be paid
2-Al-Ahlya for import & export Co. has the following transactions:
Aug. 2 - Imported goods from Italy, the invoice value of goods “CIF” is 24000 EURO . custom duty
is 20% of accepted value, shipping and handling expenses 2800 EGP, containers inspection
expenses 875 EGP, other expenses on custom area 1300 EGP. transportation expense
1800EGP.
Aug. 8 – Sold goods Value of 1482000 EGP. Invoice No.10810.
Aug.13 - Paid the following expenses:
- Stationary supported by invoice value of 74100 EGP.
- Maintenance supported by invoice value of 46512 EGP
- Ink for printers not supported by invoice value of 9811 EGP.
Aug. 15 – Purchased local goods from AL NASR Co. by invoice No.151844 Value of 697680 EGP.
Aug.22 – Sold Goods value of 1710000 EGP. Invoice No.10811.
Aug.25 – Export goods to Iraq value of 88000 EURO. Invoice No.1005188.

If you learn that:


- Custom did not accept the value of imported invoice and reprising it by 30000 EURO.
- Euro exchange rate is 1 EURO = 19.75 EGP.
- The company has a Credit foreword value added tax from the last month value of
80477EGP.
Required :
E) Compute value added tax for inputs.
F) Compute value added tax for output.
G) Value added tax due.
H) Value added tax should be paid ( if found ).
Solution :

B) Value added tax for inputs for :

- Goods imported
Value of acceptable from custom × euro exchange rate = Value of acceptable from custom EGP.
30000 Euro × 19.75 = 592500 EGP.
Custom Duty (Value of acceptable from custom EGP× 20% )
592500 × 20% = 118500 EGP.
shipping and handling expenses 2800 EGP.
containers inspection expenses 875 EGP.
other expenses on custom area 1300 EGP.
-----------------
Cost of goods imported 123475 EGP.

Value added tax 14% 100236.50 EGP

- Local Goods purchased


Local goods purchased value = 697680 / 1.14 = 612000
Value added tax for local goods purchased =
612000 × 14% = 85680 EGP

- Value added tax for Commodity :


Stationary supported by invoice = 74100/1.14 = 65000
Value added tax for Stationary = 65000 × 14% =9100 EGP
Ink for printers ( not supported by invoice ) = 0

- Value added tax for Services :


Maintenance supported by invoice = 46512/1.14 = 40800
Value added tax for Maintenance = 40800× 14% = 5712 EGP
Value added tax for inputs

Inputs VAT Total value Imported Loca Inputs


l
195016.5 1392975 715975 677000 commodity

5712 40800 40800 Services


Machin. & Equip.
200728.50 1433775 715975 717800 Total
+
Adjustments
200728.50 Inputs VAT

B ) Value added tax for outputs

Goods Sold =
1482000/ 1.14 =1300000 EGP
1710000/1.14 = 1500000 EGP
Value added tax for Goods sold = 3192000 × 14 % = 446880 EGP.
Export Goods = 88000× 19.75= 1738000 EGP
Value added tax for export goods= 1738000 × 0 % = 0 EGP.
VAT Total value Services Commodity Tax Rate
392000 2800000 2800000 14 %

0 1738000 1738000 Zero


Exmp
.
Total
+Adjustments

392000 VAT on outputs


c) Value Added tax Due
VAT for outputs – VAT for inputs = 191271.50 EGP

D) value added tax should be paid


Dr. / Cr. Credit balance VAT Due VAT on VAT on
outputs
forward Inputs

110794.50 -80477 191271.50 200728.50 392000

VAT should be paid is 110794.50 L.E

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