Sale of a car by a company to an individual

Sale of a car by a company to an individual

 

Question:
Hello,

Our company bought a car some time ago from an individual with a contract of sale and did not use a tax credit because no invoice was issued. The value is below the materiality threshold and is not recorded as fixed assets. Now the sale of this car to an individual is forthcoming. A contract of sale will be prepared, but should our company issue an invoice even if the person does not want it? Should VAT be charged and entered in the Sales Log (as she has not used a tax credit before)? If the payment is in cash, should a receipt be issued? What are the accounting items for the sale? - (as the car is not fixed assets).

Thanks in advance!

 

Answer:

Hello,

When selling the asset, you should issue the appropriate sales invoice. However, you will not charge VAT in it, as for grounds for non-charge of VAT you will indicate Art. 50 of the VAT Act. Respectively, the invoice is also entered in the sales diary. Once the payment has been made in cash, you will also need to issue a receipt. The accounting records are standard - 411/709, with the value of the sale, for reporting the income and 709 / the account on which you keep the asset with the value of which the asset is kept, for its writing off.

We hope we have been helpful.

Greetings!