The Subcontracting invoice is issued by subcontractor companies, and requires a special VAT application. Companies working with subcontractors according to the liability application in textiles, confection and scrap metal sectors, pay 2/3 of VAT amount specified in the invoice issued by the subcontractor to the government by declaring it in VAT Return instead of paying it to the subcontractor in order to secure the tax to be paid.
A subcontractor invoice is a service invoice. The subcontractor invoice information is recorded by selecting subcontracting as the line type in Service Invoices. The reports list the Subcontractor Invoice information along with VAT Deduction and VAT to be Declared information. VAT Deduction and VAT to be Declared information is calculated and reported according to the quantity entered in the invoice lines.
In sales and purchase invoices, subcontracting application can be done based on line. For this, line type must be selected as "Service". In the event of selecting the service card which was defined by checking "Apply Deduction" option, subcontracting can be applied to invoice line.
The connection codes required to post the subcontractor invoices to G/L are recorded using the G/L Connection Codes option located under the Main Records menu of the General Ledger section of the LOGO application. The Purchase - Deduction VAT Codes and VAT Codes for Deductions over Payments options located under VAT G/L Codes menu are used for this transaction. The subcontractor invoice is posted to G/L as follows after the relevant connection codes are provided:
For the company subcontracting the job:
Net Amount (B)
1/3 VAT (B) 191… VAT to be deducted
2/3 VAT (B) 191… VAT to be paid as the responsible
Net Amount + 1/3 VAT (A)
2/3 VAT (A) 391…. VAT Amount (Calculated) as the responsible
For the subcontractor:
Net Amount + 1/3 VAT (B)
Net Amount (A)
!/3 VAT (A) 391…. VAT Amount (Calculated)