- When you create a sales tax in Balabook, Balabook automatically adds a sales tax liability account to your Chart of Accounts. This account is named after the sales tax you created. Each time you create a transaction that includes sales tax, the tax amount is recorded in this liability account.
- If you manage multiple sales taxes, ensure that each tax has a name you can recognize easily.
How Sales Tax is Calculated:
There are two types of sales tax calculations in Balabook: exclusive of tax and inclusive of tax.
Exclusive of tax: sales tax is calculated based on the base price and then added to that price to determine the transaction total. Common examples are invoices and bills
Inclusive of tax: sales tax is included in the total transaction amount. The pre-tax amount comes from the total and the sales tax rate. This method is often used for income and expense transactions.
View Your Sales Tax Transactions:
You can view your sales tax transactions using the VAT Return report .The VAT Return report is a summary of all transactions categorized by individual sales tax.
It organizes information on:
- Tax collected.
- Tax paid.
- Payments or refunds to and from the government.
