Tax Entry from GL: General Information

In MYOB Advanced, you can configure automatic tax calculation in documents that you create in the system. You can also create tax-related transactions manually in the general ledger. These transactions update the balances of the GL accounts specified for each journal entry of the transaction.

Note: The manual creation of tax-related transactions is available only if the Tax Entry from GL Module feature is enabled on the Enable/Disable Features (CS100000) form.

Learning Objectives

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

  • Configure a withholding tax
  • Process a taxable transaction with the new tax in the general ledger

Applicable Scenarios

You create taxable transactions directly in the general ledger if you are required to withhold taxes from GL transactions and create tax-related transactions manually.

Manual Creation of a Tax-Related Journal Transaction

To create a tax-related journal transaction, you use the Journal Transactions (GL301000) form. On this form, when you enter transaction data, you select the Create Tax Transactions check box, which causes the additional Tax ID and Tax Category columns to appear in the table.

Each tax-related transaction should contain at least three journal entries:

  • A journal entry that represents the taxable amount. (This amount can be recorded, for example, to any expense or income account, depending on the tax type.)
  • A journal entry that represents the tax amount.
  • A journal entry that represents the document amount. (This amount can be recorded, for example, to the Accounts Payable account.)

With a transaction entered in the general ledger, the system does not calculate taxes; it uses the tax amount entered by the user. For details, see Tax Entry from GL: Generated Transactions.

Calculation of Tax Amounts

When you specify the account (and subaccount, if applicable) to which the tax amount is recorded in the Account (and Subaccount, if any) column on the Journal Transactions (GL301000) form, the system automatically enters the tax associated with this account (and subaccount, if any) in the Tax ID column.

Note: The account (and subaccount, if any) associated with the tax has to be specified in the Tax Payable Account (and Subaccount) or Tax Claimable Account (and Subaccount) box, depending on the tax type, on the GL Accounts tab on the Taxes (TX205000) form during configuration of the tax in the system.

While you are adding a journal entry, you can overwrite the default Tax ID value.

Calculation of Taxable Amounts

When you select the account to which the taxable amount will be recorded in the Account column on the Journal Transactions (GL301000) form, the system automatically enters the tax category associated with the general ledger account. The associated tax category is the one that is assigned to the selected general ledger account in the Tax Category column on the Chart of Accounts (GL202500) form.

Note: Before you create a tax-related transaction, a tax category has to be specified for the general ledger account that you select in the Account column.

Entry of Amounts to the Tax Report

The tax-related amounts will be reflected in the appropriate tax report only if the number of the document related to the journal transaction is specified for each journal entry in the Ref. Number column of the Journal Transactions (GL301000) form.

If the Ref. Number column is empty, the tax and taxable amounts will not be reflected in the tax report. For details on tax reports, see Tax Report for VAT: General Information.

Note: You can define this column to be mandatory by selecting the Require Ref. Numbers for GL Documents with Taxes check box on the General Ledger Preferences (GL102000) form.