Sales Taxes (VAT)

A simple scheme to represent your sales tax on bkper

On Purchase (when you buy)

Accrual

The purchase itself 
100 Supplier (liability) >>  Expense (outgoing)
10 Supplier (liability) >> Sales Tax Reclaimed (asset)

Paying supplier
110  Bank (asset) >> Supplier (liability)

Getting tax back
10 Sales Tax Reclaimed (asset) >> Bank (asset) 
see example 1

Cash

The purchase itself  
220  Bank (asset)  >>  Expense (outgoing)

Reserving the Sales Tax
20  Expense (outgoing) >> Sales Tax Reclaimed (asset)

Getting tax back 
20 Sales Tax Reclaimed (asset) >> Bank (asset)
see example 2  
 
 

On Sales (when you sell) 

Accrual

The sale itself 
330  Product/Service (incoming)  >>  Customer (asset)  
30  Sales Tax Due (liability)  >>  Product/service (incoming) 

Receivable payed
330 Customer (asset) >>  Bank (asset) 

Paying tax
30  Bank (asset) >> Sales Tax Due (liability)  
see example 3

Cash

The sale itself  
440 Product/Service (incoming)  >>  Bank (asset)     

Reserving the Sales tax
40 Sales Tax Due (liability)  >>  Product/service (incoming) 

Paying tax 
40  Bank (asset) >> Sales Tax Due (liability)    
see example 4
 
 

Periodic Sales tax closing 
Normally Sales tax are closed with a payment of the difference between the Sales Tax Due minus the Sales Tax Reclaimed and not separate entries for each of these accounts as in the samples above. 

Balance value Sales Tax Reclaimed (asset) is 200 
Balance value Sales Tax Due (liability) is 1000

The related transactions 
800 Bank Account (asset) >> Sales Tax Due (liability) 
200 Sales Tax Reclaimed (asset) >> Sales Tax Due (liability) 

Note: for simplicity we used 10% sales tax in the sample bookings
 
 

Sample book for  Sales Tax
 
 
 

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