Input VAT: debit or credit?
Input VAT increases on the debit side and decreases on the credit side: its normal balance is a debit.
Assets are resources the business controls. They increase with a debit.
Name in each convention
Account names and codes follow each convention; an account that does not exist in a convention is not offered there.
| Convention | Account |
|---|---|
| United States (US textbooks) | — |
| Spain (PGC 2007) | 472 Hacienda Pública, IVA soportado |
| France (PCG 2025) | 44566 TVA sur autres biens et services |
| Germany (generic accounts) | Vorsteuer |
Practice entries that use this account
- Owner takes goods from stock for personal use
- Owner pays a business expense personally
- Buying merchandise for cash
- Buying merchandise on credit: invoice total including VAT
- Buying merchandise, paying part now and the rest on credit
- Returning part of a purchase on credit
- Paying a supplier within the discount period
- Paying a carrier for delivering purchased goods
- Buying office supplies for cash, with VAT
- Buying office supplies on credit, with VAT
- Buying merchandise with a trade discount
- Buying merchandise on credit with VAT
- Returning goods bought on credit, with VAT
- Buying merchandise with a cash discount on the invoice
- Buying merchandise under the periodic inventory system
- Buying a machine paid at once by bank transfer, with VAT
- Buying a computer server on credit, with VAT
- Buying a machine with a payment on delivery and a bill of exchange for the rest
- Buying a machine with transport and installation, with VAT
- Buying a machine, part paid and part on credit, with VAT
- Buying a building with a mortgage loan and a bank transfer
- Buying a delivery van with a bank loan, with VAT
- Trading in an old delivery van for a new one
- Paying for a machine repair, with VAT
- Adding a refrigeration unit to a van, on credit, with VAT
- Paying the monthly rent of the business premises
- Paying six months’ rent in advance
- Receiving the electricity bill
- Paying for advertising, with VAT
- Receiving a telephone invoice to pay later
- Settling VAT for the period
- Replenishing petty cash after several small expenses
- Paying freight-out on goods sold
- Returning damaged goods for a cash refund
- Purchase discount taken, reducing inventory