VAT returns

The VAT return report helps you calculate how much VAT you owe (or are owed) for a given period. It is essential for businesses registered for VAT in the EU.

Prerequisites

Before using the VAT return report, configure your VAT accounts in Settings > Organization:

• VAT input control account -- The account where deductible domestic VAT on purchases is tracked (e.g., 411000 in the Belgian PCMN).
• VAT collected control account -- The account where VAT collected on sales is tracked (e.g., 451000).
• Default local VAT rate -- Your standard domestic VAT rate (e.g., 20% for the UK, 21% for Belgium). Required for reverse charge self-assessment.

The following accounts are created automatically when first needed:

• Foreign VAT Recoverable -- Tracks foreign VAT paid on supplier invoices (reclaimable via a separate foreign VAT refund scheme, not on your domestic return).
• Reverse Charge Input VAT -- Self-assessed deductible input VAT on reverse charge purchases.
• Reverse Charge Output VAT -- Self-assessed output VAT on reverse charge purchases.
• VAT Input (Non-deductible) -- Non-deductible portion of purchase VAT (applies to all tax schemes).

Without the core VAT accounts configured, the report cannot separate VAT amounts from other transactions.

Accessing the VAT return

Navigate to Reports > VAT Return. Select the period you want to report on using the date range controls.

How to read the report

The VAT return shows four key figures:

VAT on sales (output VAT)

The total VAT you collected from customers during the period. This is money you owe to the tax authorities.

VAT on purchases (input VAT)

The total VAT you paid to suppliers during the period. This is money the tax authorities owe you (deductible VAT).

Net VAT position

Output VAT minus Input VAT = Net VAT

• A positive number means you owe VAT to the authorities.
• A negative number means you are due a refund.

Reverse charge VAT

If you have reverse charge invoices, the report shows the self-assessed amounts separately. The reverse charge input and output entries always net to zero, but both must be declared on your VAT return in the relevant boxes.

Foreign VAT

Foreign VAT (paid to foreign suppliers) is tracked in the Foreign VAT Recoverable account and does not appear in your domestic VAT return calculation. Reclaim it via a separate refund scheme (EU VAT Refund Directive or 13th Directive for non-EU businesses).

Other VAT movements

Any additional VAT entries that do not come from tagged invoices — corrections, adjustments, or settlements recorded directly in the VAT control accounts.

Invoice-tagged vs. other movements

The report separates:

• Invoice-tagged VAT — VAT amounts linked to specific invoices in the expenses or revenue sections. These are the most common entries.
• Other account movements — VAT entries recorded directly in the control accounts, not linked to invoices. These might include manual adjustments or corrections.

This separation helps you and your accountant verify that all VAT is properly documented.

Multi-currency VAT

If you operate in multiple currencies, VAT amounts are shown separately per currency. This is important for businesses that trade across currency zones.

Filing your VAT return

Financica generates the data you need for your VAT return, but does not file directly with tax authorities. Use the report to:

1. Review the figures with your accountant.
2. Enter the amounts into your local tax authority's filing system.
3. Keep the report as documentation for audit purposes.

Printing

Use the settings menu (gear icon) in the report header to open the print view. This renders the VAT return in a print-optimized layout with your organization name and logo, then opens your browser's print dialog. You can print to paper or save as PDF using your browser's built-in "Save as PDF" option.

Typical VAT periods

• Monthly — Required for larger businesses in most EU countries.
• Quarterly — The default for smaller businesses.
• Annual — Available in some jurisdictions for very small businesses.

Check with your accountant or local tax authority for your filing frequency.