Re: [SL] Refund Checks

[Tony F. <to...@sy...>]

On Sun, 2006-11-26 at 23:59 +0200, Dr Eberhard Lisse wrote:
> By the way, this Credit Note business of yours, how would it work if
> you
> paid VAT? Ie, where you *have* to pay it *and* later claim it back? I
> operate a domain Registrar and the Registry it exclusively works with.
> So I could just do what you are doing, but would end up in jail for
> violating the VAT act. Irritating, but I just pay the Receiver wait 2
> months and get it back :-)-O.

I never said I didn't pay the taxes due...

Say I do some work. Invoice to customer:
  Labour   $100
     Tax   $ 20
   Total   $120

And I buy some goods: Invoice from Vendor:
  Parts $ 80
    Tax $ 16
  Total $ 96

The Customer and Vendor happen to be the same legal entity so at the end
of the month I "pay" the Vendor invoice by debiting the holding account.
I then issue the customer a "Credit Note" (Negative AR Transation
crediting the holding account) for $96 and apply it as a payment on the
invoice they owe to me. Then the Customer issues me a Cheque for $24
which I use to pay the remaining balance of the invoice.

When I report to the tax man I report $20 collected and $16 paid and
send a cheque for $4. AFAIK all perfectly legal under our tax laws...
Yours may be different.

-- 
Tony Fraser
to...@sy...
Sybaspace Internet Solutions                        System Administrator
phone: (250) 246-5368                                fax: (250) 246-5398