German VAT in Quickbooks

Discussion in 'Accounts & Finance' started by Jayser100, Jan 5, 2016.

  1. Jayser100

    Jayser100 UKBF Enthusiast Full Member

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    Hope someone can help -

    We had to register for VAT in Germany recently. We have set up a new German VAT account on Quickbooks, and we use multi-currency to make German invoices in euros. The problem I have is that, when I run reports for the German VAT account, Quickbooks converts the currency into pounds sterling. Obviously I need the total sales amount in euros.

    I can't think why Quickbooks makes this currency conversion since there isn't surely any reason why someone would want to make a separate VAT account in the first place, unless they had registered to pay said VAT in the currency relating to the country concerned?

    My question is, can QB be set up so that the German VAT account does not convert the figures into sterling for VAT reports? Have we missed something?
     
    Posted: Jan 5, 2016 By: Jayser100 Member since: May 21, 2009
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  2. Trader82

    Trader82 UKBF Contributor Free Member

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    .
     
    Posted: Jan 5, 2016 By: Trader82 Member since: Nov 4, 2015
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  3. Bob

    Bob UKBF Big Shot Free Member

    3,668 929
    ...and the answer is o_O
    By the way, I don't know either :cool:
     
    Posted: Jan 5, 2016 By: Bob Member since: Jul 24, 2009
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  4. Trader82

    Trader82 UKBF Contributor Free Member

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    :D
     
    Posted: Jan 5, 2016 By: Trader82 Member since: Nov 4, 2015
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  5. john1989

    john1989 Guest

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    I would imagine any new account set-up within QB would default to converting to local currency.

    Any liability or asset deriving from the VAT will still need to be reported in GBP in your year end accounts.

    I don't use QB but it sounds like the report set up that you need to sort out to get it to report in foreign currency.

    Maybe something that @Pish_Pash knows how to do as he uses QB?
     
    Posted: Jan 5, 2016 By: john1989 Member since: Jan 1, 1970
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  6. Jayser100

    Jayser100 UKBF Enthusiast Full Member

    718 122
    And the answer is... you can't do it. As john1989 correctly says, all currency needs to be converted for bottom line accounting figures BUT if you are registered to pay VAT in a Eurozone country, obviously you need to be able to run a VAT report in euros and at the local VAT rate. I called Intuit after making my posting and they confirmed you can only generate VAT reports in the base currency you have QB set up for. I tried to explain to the guy that, if you can't generate VAT reports for non UK VAT accounts, in the native currency, then said reports are about as much use as a chocolate teapot. I am not sure he really understood but there you go. We'll simply have to work out the figures each month manually by adding up the value of all invoices generated for German customers, the old fashioned way, i.e. on a calculator!
     
    Posted: Jan 5, 2016 By: Jayser100 Member since: May 21, 2009
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  7. john1989

    john1989 Guest

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    How often do you change the exchange rate in QB?
     
    Posted: Jan 5, 2016 By: john1989 Member since: Jan 1, 1970
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  8. Jayser100

    Jayser100 UKBF Enthusiast Full Member

    718 122
    We do it every day, first thing in the morning, to try and keep it as accurate as possible
     
    Posted: Jan 5, 2016 By: Jayser100 Member since: May 21, 2009
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  9. john1989

    john1989 Guest

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    So can you get the data needed for the VAT return in home currency, and a list of daily exchange rates both in excel?
     
    Posted: Jan 5, 2016 By: john1989 Member since: Jan 1, 1970
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  10. Pish_Pash

    Pish_Pash UKBF Ace Free Member

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    This is actually the one thing that stops me from world domination (i.e. selling from within Germany via Amazon.de FBA!! Which I reckon will be lucrative, I'm already selling a lot to Germans from Amazon.co.uk)....I had hoped someone would be able to pull this off in QB .

    I was duped by Quickbooks having a multiple VAT agency feature .....certainly in the USA , QB Stateside users need this functionality....but of course it's all in their base currency USD.

    Re the alternative....going off piste & working it out...this wouldn't be so bad for me (as my sales data all gets fed into MS Access first ,then into Quickbooks... MS Access could quite easily track the German VAT aspect, but my head hurts how I'd then account for all this gubbins in Quickbooks. It's all very well knowing how much you need to pay the German VAT man, it's another knowing how to key all the local workaround into Quickbooks!)

    This will be my first challenge of 2016 I reckon :)
     
    Last edited: Jan 5, 2016
    Posted: Jan 5, 2016 By: Pish_Pash Member since: Feb 1, 2013
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  11. Jayser100

    Jayser100 UKBF Enthusiast Full Member

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    It's actually not as bad as you might think Pish Pash. If you set up Amazon Germany as a virtual 'Customer' (with a 19% VAT account set up of course) and then make all of your invoices for sales on Amazon.de for that customer, you can then simply (in Quickbooks) select Amazon Germany from the customer list to bring up the information screen, then list all sales transactions from the previous month. It totals them for you at the bottom. For me, this is the bulk of it, all I then need to do is add on any German eBay, website and trade invoices for the month (usually only a few) and I have the total sales net figure. This is a more accurate and actually quicker way of doing it than mucking about with currency conversions. I never buy anything from Germany (purchases), so once I get the sales total I just need to work out the 19% VAT that Quickbooks has removed to achieve the net figures shown in the lists and then send the total sales figure plus VAT amount to the third-party company who make the returns for me. All in all not a lot of hassle.
     
    Last edited: Jan 8, 2016
    Posted: Jan 8, 2016 By: Jayser100 Member since: May 21, 2009
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  12. Pish_Pash

    Pish_Pash UKBF Ace Free Member

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    I guess I don't understand enough about accounts to know whether your solution is watertight(!). Accounts software - to my mind at least has a 'whack-a-mole vibe about it.....i.e. you do this 'here', but then unbeknownst (at last, I get to use that word) the impact is that something thens pops up 'there'

    The totalling up of VAT owing to Germany for me is of no hassle whatsoever....as I say my sales data gets fed into MS Access, I can easily create a query to tot up the German VAT in the blink of an eye.

    But ultimately the VAT attributed to German sales has to be 'ring-fenced' & not show on the profit & loss in quickbooks.....that works with UK VAT because the corresponding VAT ends up in the VAT liability account.....but I still don't know how I'd organize such German sales so that the VAT is ring-fenced & not showing on all the reports erroneously as pure income (vs income net of VAT)
     
    Posted: Jan 8, 2016 By: Pish_Pash Member since: Feb 1, 2013
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  13. john1989

    john1989 Guest

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    It's called double entry (and is not an adult film).
     
    Posted: Jan 8, 2016 By: john1989 Member since: Jan 1, 1970
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  14. Pish_Pash

    Pish_Pash UKBF Ace Free Member

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    I seldom believe what I'm told, so I thought I'd better check your statement & visited PirateBay - it transpires it is an Adult film (not much of a plot, but educational nonetheless)...ironically it was German (at least I think it was German....does "platzieren Sie Ihre Schweinswurst in meinen Schließmuskel" sound like German?)
     
    Posted: Jan 8, 2016 By: Pish_Pash Member since: Feb 1, 2013
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  15. john1989

    john1989 Guest

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    Posted: Jan 8, 2016 By: john1989 Member since: Jan 1, 1970
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  16. Pish_Pash

    Pish_Pash UKBF Ace Free Member

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    :) Yes, I realize it was double entry that's causing tthis (but whack-a-mole sounds funkier)....I guess what I'm saying is, I don't have sufficient 'accountancy' chops to know if any Quickbooks German VAT workaround pops up elsewhere & bites me later!
     
    Posted: Jan 8, 2016 By: Pish_Pash Member since: Feb 1, 2013
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  17. Jayser100

    Jayser100 UKBF Enthusiast Full Member

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    Remember, you don't have to register unless you go above the 100K threshold OR you fulfil orders from within Germany (including FBA) so for most companies it isn't relevant anyway. Nothing is going to come back and 'bite you on the bum' if you're paying 19% of your German sales to the German tax authorities each month, if applicable.
     
    Posted: Jan 11, 2016 By: Jayser100 Member since: May 21, 2009
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  18. Pish_Pash

    Pish_Pash UKBF Ace Free Member

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    Yes, I know, but I think fulfilling from within Germany will see a jump in related sales (so it's with that in mind that I need to sort the German VAT aspect out)

    I meant from my accounts perspective.... the 'working out 'how much I owe the German Authorities' is easy but for the life of me, I can't work out how to input this into Quickbooks in a way that doesn't cause heartache, confusion, errors or doubt.
     
    Posted: Jan 11, 2016 By: Pish_Pash Member since: Feb 1, 2013
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  19. Pish_Pash

    Pish_Pash UKBF Ace Free Member

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    I keep coming back to this useful post, because it's my end 'goal' to start selling from within Germany this year....and this 'accounting for German VAT' melarkey is the only thing that stops me at present.

    I sort of follow what you do, but have these questions....

    1. For your 'virtual' Quickbooks German customer ....are you recording all sales there net of German tax ...if so, then surely this will cause all manner of problems when you come to reconcile as your true bank will have the payment inclusive of VAT?

    &/or....

    2. Once you have your calculated VAT in your 'workaround' above, how do you account for the VAT in quickbooks that you've sent to the german Authority? A journal entry?

    So for example ....let's say you've setup a German 'virtual' customer in Quickbooks., you make a sales for €100+ VAT (@19% for germany)

    Are you recording €100 for the sale with a code of say 'O' (outside the scope of VAT?)

    or are you recording €119 (i.e. inc. VAT) ...if you are then (as you've mentioned) the associated VAT owing is going to show up in a Quickbooks liability account in sterling (depending on whatever exchange rate you've booked). Fine if you've only one transaction, but if you've a lot of transactions, my head hurts at how to work out the 'process'.

    I'm actually wondering is it's worth simply having a second Quickbook company file to track German sales with EUR setup as the base currency?

    Frankly, in my opinion, for 2016, it seems accountancy packages are waaaaaayyyyyyy behind the curve...I'm a small time trader, but even I need the (seemingly simple) requirement to have more than one VAT agency & in more than one currency.
     
    Posted: Jan 27, 2016 By: Pish_Pash Member since: Feb 1, 2013
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  20. Jayser100

    Jayser100 UKBF Enthusiast Full Member

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    before setting Amazon Germany up as a 'customer', you will need to make a new VAT account on Quickbooks for German VAT at 19%. Next, make the 'customer' and as you do so, click on the VAT tab and choose your German 19% VAT account to apply it. When you make your invoices, it will automatically apply the 19% to the 's' VAT code instead of the UK 20% and so the invoice will be worked out with the gross figure showing, just as you need. You don't use 'O', you use 'S' as usual.
     
    Posted: Jan 28, 2016 By: Jayser100 Member since: May 21, 2009
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