Purchases with a Sales Tax: General Information

A sales tax is a tax paid by a company to its vendors as a part of the amount of an AP bill. When the company pays the accumulated tax amounts to the responsible tax agency, the tax amounts are reduced by the amount of sales tax paid to the vendors. In MYOB Advanced, the system calculates the sales tax in vendor documents automatically.

Learning Objectives

In this chapter, you will learn how to do the following:

  • Learn how to configure a sales tax
  • Learn how to create an AP bill with a sales tax applied
  • Release an AP bill and review the GL batch generated by the system

Applicable Scenarios

You create an AP bill with any number of sales taxes to record a purchase that is subject to sales taxes.

Tax Calculation in Purchase Orders

The system calculates taxes based on the following details specified in the AP document created on the Bills and Adjustments (AP301000) form:
  • The vendor
  • The inventory IDs
  • The total price of the inventory items
  • The document date
The system calculates the tax and taxable amounts of the AP document by using the settings of each tax that corresponds to both of the following:
  • The tax category of the specified inventory ID in each line of the bill
  • The tax zone of the selected vendor

The system calculates the tax and taxable amounts for each line of the document or for the total document amount, depending on the settings of the applied tax. The system inserts the sales tax amount in the Tax Total box in the Summary area of the Bills and Adjustments form.

When you release the AP document, the system creates the corresponding GL transaction and records these amounts to the appropriate GL accounts.