The Tax Bot records VAT or other Sales Taxes on purchase or on Sales transactions posted in your book.
The Tax Bot reads Custom properties from your book, to calculate the amount of the tax, recording it in another transaction.
The Tax Bot can extract taxes included in the original amount and/or calculate taxes non included in the original amount. Here is an article that better explain it.
On Posting a transaction in your book the Tax Bot checks accounts and groups properties if the tax_included_rate or tax_excluded_rate properties are present. If so, it will automatically record another transaction, based upon the amount and the tax_included_rate and tax_excluded_rate properties of the posted transaction.
- Go to "Automations Portal" in your book.
- Choose Tax Bot
- Click install
In your book on the transactions page you will see the Bot working alongside with you. When you not see the bot logo on your book, it is not installed correctly.
Output included VAT on sales example:
1. Create accounts:
- Create an incoming account for a service you sell (example: Product A)
- Create an Output tax (liability) account.
- Create an asset account (example: Bank)
2. Then, add the custom properties to the incoming account (example above: Product A). The properties are:
- tax_included_rate: The tax rate to apply to the new transaction.
- tax_description: The description of the generated transaction
3. Post your transaction: Product A > Bank
4. Now each time you record a transaction for selling Product A the Tax Bot detects the tax_included_rate property, calculates the amount of tax included in the original price and records another transaction for that amount to the Output tax account.
You manufacture Product A from the Materials A and Materials B. On Product sales register 7.25% Sales Tax and on the Materials purchases you register respectively 7.25% and 8.5%.
- Tax on sales
Create an Output tax (liability) account.
Create a Product A (incoming) account and insert the properties:
- Set the tax_description to the Product A account.
- Set the tax_included_rate to the Product A account.
Input included VAT on purchase example:
Create an Input tax (asset) account.
Create a Materials A and a Materials B account (outgoing) and insert the properties:
- Set the tax_description to both Materials accounts.
- Set the tax_included_rate to both Materials accounts.
Record purchase and sales entries with the taxes included so the Bkper Tax Bot can calculate and record it on the respective asset or liability account.
Closing outstanding VAT balance
At some point in the end o tax period, there is an outstanding Input and Output tax balances.
If you keep two separated Input and Output tax account like the previous example, you should then deduct one from another and pay an amount due or claim an amount receivable based on the outstanding balance left in one of those accounts, like bellow:
The Tax Bot is installed via our Automations Portal.