‘VAT on sales minus VAT on purchases’ is useful but incomplete. The period calculation must include tax point, eligibility of each purchase, prior credit, adjustments and possible withholding.
The control formula
- Output VAT due
- less eligible current-period input VAT
- less prior carried credit
- plus or minus adjustments
- equals VAT payable or new credit
1. Calculate output VAT
Start from operations whose VAT became due in the period, not every invoice issued without distinction. Split net and VAT by rate, then include evidenced advances, credits and corrections.
| Control | Question |
|---|---|
| Rate | validated rule for each line? |
| Collection | date and amount received? |
| Debits | declared and applied option? |
| Credit note | linked to original invoice? |
| Total | reconciled to sales/accounts? |
To recover net from a gross total at 20%, divide by 1.20; at 10%, divide by 1.10. Never combine rates into an average division.
2. Test input VAT
Include only VAT qualifying for deduction and arising in the period under article 101: invoice in the beneficiary’s name, connection to qualifying activity, payment or customs receipt and no exclusion.
- Match invoice and receipt.
- Check identity and detail.
- Evidence payment/tax point.
- Test exclusion and mixed use.
- Check payment method where required.
- Exercise within the one-year maximum.
A purchase invoice posted but not yet paid may not create deduction at the same time under the applicable regime.
3. Follow a clearly hypothetical example
Assume one month of fully taxable operations: MAD 120,000 net sales at 20%, producing MAD 24,000 output VAT. Paid, fully eligible purchases contain MAD 13,000 VAT. MAD 2,000 prior credit is available.
| Line | Amount |
|---|---|
| Output VAT | MAD 24,000 |
| Eligible input VAT | – MAD 13,000 |
| Prior credit | – MAD 2,000 |
| Hypothetical adjustment | + MAD 500 |
| VAT payable | MAD 9,500 |
The example assumes rates and rights are validated. Real returns add each rate, exemption, prorata, withholding, asset adjustment and timing rule.
The example is not a return template
It deliberately omits several situations to explain mechanics. Do not copy its lines without the actual regime, invoices and adjustments.
4. Reconcile before filing
Compare the calculation with VAT accounts, revenue, invoices and payments. Explain each difference instead of forcing a cell to reach the accounting balance.
- Sales: net and VAT by rate
- Collections: tax point and advances
- Purchases: eligible paid invoices
- Credit: exactly from prior filing
- Balance: payment or carry-forward after approval
BelloPOS can produce output detail by rate and payment method. Input VAT and adjustments come from purchases/accounting.
Mistakes to avoid
- Treating all invoices issued as due.
- Mixing gross totals at several rates.
- Deducting every posted purchase.
- Forgetting prior credit.
- Ignoring credits.
- Entering an unsupported adjustment.
- Forcing the expected result.
Frequently asked questions
What is the simple formula?
Output VAT due minus eligible input VAT minus prior credit, adjusted for required regularisations.
Is a credit automatically refunded?
No. It normally carries; refund is limited to statutory cases.
Is purchase VAT deducted at invoice date?
The right notably arises on payment of the invoice in the beneficiary’s name or customs receipt under article 101.
How are several rates handled?
Calculate base and VAT separately for each rate, then total the lines.
Does BelloPOS calculate input VAT?
No. It calculates recorded output; input requires purchase invoices and accounting tests.
What to take away
A reliable VAT calculation exposes four layers: output due, eligible input, credit history and documented adjustments.
Sources
The figures and rules quoted above come from these pages, read on the date given in the article.
Export output VAT by rate
Use sales, payments, credits and refunds as the first half of the VAT reconciliation.
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