@Christopher Lam<mailto:christopher@gmail.com> I'll show this to my
accountant.
In the meanwhile, I tried following:
Created a 'TAX' account under 'Liability' parent account. Then created 2
sub-accounts under the TAX account, Input VAT & Output VAT respectively. Now,
when I post the vendor bills or customer invoices, the VAT is recorded properly
in these sub-accounts, and their main account TAX also shows a final figure.
But, from here I'm not clear what to do. I passed an entry:
DR TAX
CR Bank
with the equivalent amount. This did make the amount to '0' for the TAX, but
the 2 sub-accounts still have the respective amounts in them. Although, the
Liabilities parent account was also showing a correct balance, as I think it
just picks up the amount from TAX.
Not sure if this will be a correct way of doing, or maybe there are multiple
ways to do this.
From: Christopher Lam
Sent: Sunday, August 16, 2020 2:00 PM
To: Omer Hayat
Cc: gnucash-user@gnucash.org
Subject: Re: [GNC] Recording Tax Correctly
Hi Omer, my approach is:
* VAT:Input VAT - an ASSET account
* VAT:Output VAT- a LIABILITY account
* VAT:VAT Return - an ASSET or LIABILITY account
and run the "Income & GST Statement" periodically, posting the govt returns as
follows:
Dr VAT:VAT Return
Cr Bank
HTH, C
On Sun, 16 Aug 2020 at 07:55, Omer Hayat
mailto:omer.ha...@outlook.com>> wrote:
Hi.
We have a 5% VAT charged on all bills and invoices. To the government, we pay
the difference.
I have setup an 'Input VAT(paid to Vendor)' and 'Output VAT(received from
Customers)' accounts under Liabilities, and set them up. These are recording
the VAT paid & received from Bills/Invoices correctly. The Input VAT account
has negative values, and output VAT has positive values. We are supposed to pay
the difference of these.
For example:
VAT paid to Vendor
(50.00)
VAT received from Customer 75.00
FINAL VAT PAYABLE TO GOVT 25.00
Keeping the above example, I would like to pass one entry, and pay off the
difference amount.
Example:
DR Final Payable to Govt
CR Bank
But, how can I pass the Debit entry? Should I create a 'Tax' placeholder
account and pass it to that? But then the individual Input & Output VAT
accounts might have a balance.
Please advise.
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