Overview:
The Deferred VAT setting in Advanced Options lets companies control whether Deferred VAT is available in QNE QCA. By default, it is OFF to comply with Republic Act No. 11976 (Ease of Paying Taxes Act), which requires VAT recognition at invoicing. Businesses with special workflows, such as legacy postings or non-VAT deferrals, can temporarily turn it ON with a confirmation prompt to ensure awareness of compliance requirements.
Scenario:
A Philippine company needs to post a legacy adjustment using Deferred VAT. Since Deferred VAT is OFF by default, the accountant enables it in Advanced Options, acknowledges the compliance reminder, completes the adjustment, and then switches it off again to maintain proper VAT treatment going forward.
Solution:
1. Open Advanced Options
Go to Company > Maintenance > Advanced Options > Tax and there you will see the Deferred VAT Options panel with a single toggle to turn the feature ON or OFF.
2. Turn deferred VAT ON (with compliance reminder)
Toggle Deferred VAT to ON and a reminder appears:
3. Make the necessary adjustments using the available Deferred VAT fields or toggles.
Deferred VAT toggle: When the Deferred VAT is turned ‘ON’ in Advanced Options, the Deferred VAT toggle should be visible in maintenance and transactions.
The FF are the modules and transactions where Deferred VAT should be visible if Deferred VAT is switched ON:
Customer Module
Customer
Invoices
Customer Debit Notes
Customer Credit Notes
Supplier
Suppliers
Bills
Supplier Debit Notes
Supplier Credit Notes
Sales
Sales Invoice
Cash Sales
Sales Debit Notes
Sales Credit Notes
Purchases
Purchase Invoice
Cash Purchases
Purchase Debit Notes
Purchase Returns
Vat Codes: For Standard-rated if Deferred VAT is ON, the Deferred VAT Posting Account field should be visible.
Maintenance: Default Interface Accounts
For DIA, if Deferred VAT is turned ‘ON,’ the TAX Group below with posting for Deferred Input/Output VAT should become visible
4. Turn deferred VAT OFF (no prompt)
Toggle Deferred VAT to OFF. The setting is applied immediately with no confirmation prompt
Note: It is recommended to keep Deferred VAT OFF after editing transactions to comply with the EOPT Law, which requires VAT recognition at the time of invoicing. Keeping it OFF ensures accurate reporting, audit readiness, and prevents unintended deferred postings.
Application:
Compliance-first setup for a PH company
Goal: Align with EOPT by recognizing VAT at invoice issuance.
Action: Keep Deferred VAT OFF in Advanced Options → Tax.
Result: All Deferred VAT fields disappear from sales, purchases, customer, supplier, VAT Codes, and DIA, preventing accidental deferred postings while ensuring reports reflect invoice-time VAT recognition.
Legacy data continuity for a company with deferred postings
Goal: Prevent breaking changes for a company that previously used Deferred VAT.
Action: The system auto-enables Deferred VAT ON because VAT Codes have Deferred Posting Accounts and Deferred VAT transactions exist.
Result: Users retain access to Deferred VAT fields and workflows. Administrators can later migrate off deferred behavior by cleaning up dependencies and then turning the toggle OFF.
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