Accountability offers tax codes to allow agencies to set up all required input (purchases) and output (sales) tax. The system will use these tax codes on all relevant transactions to calculate taxes due and statutory tax reporting.
Steps:
- Navigate to SET UP FILES > Tax Codes.
- Click NEW TAX CODE.
- Enter the following information
| Field | Description |
| Code | Enter 1-8 characters to define a code for the tax. This field is required. |
| Description | Enter a description for the tax code. This field is required. |
| Office* |
Select an office from the drop-down to limit the use of this tax code to only the office specified. No other offices will be able to use this tax code. *See Note below |
| Restrict to Country* |
Select a country from the drop-down to limit the use of this tax code to only the country specified. All offices in this country are able to use this tax code. *See Note below |
| Tax %* |
Specify a percentage for the system to calculate the tax amount when this tax code is used. For example, entering 5 here will indicate a 5% tax. *See Note below |
| Reverse Charge %* |
Specify a percentage for the system to calculate the reverse tax charge amount when this tax code is used. *See Note below |
| Create Reverse Charge Posting (checkbox) | Check this box if the system should create a journal entry for the Reverse Charge Tax. |
| Output Tax GL Account | Enter a GL account to have the system post for output taxes. Leave this field blank to have the system post to the default GL posting account here. |
| Input Tax GL Account | Enter a GL account to have the system post for input taxes. Leave this field blank to have the system post to the default GL posting account here. |
| Receipt Tax Account | Enter a GL account to have the system post for receipt tax. |
| Payment Tax Account | Enter a GL account to have the system post for payment tax. |
| Use for Output (checkbox) | Check this box if this tax code is used for output tax (sales, i.e. client invoices). |
| Use for Input (checkbox) | Check this box if this tax code is used for input tax (purchases, i.e., supplier invoices). |
| Active (checkbox) | Check this box if this tax code is active. Uncheck the box if the tax code is no longer to be used. |
| Display on Reports As | Define text for this tax code to appear on reports. The system will default to the Code field above. You can amend it if it needs to appear differently on reports. |
| Zero Tax Lines Text on Reports | Enter text to display on reports when tax is zero. |
| Display Tax% on Reports (checkbox) | Check this box to have the system display the tax percentage on reports. If left unchecked, the system will display the tax Code only. |
| Suppress Tax? | Select from the drop-down if the system should suppress tax. |
5. Click SAVE or SAVE & CLOSE.
- Office and Restrict to Country fields - The use of these fields is to restrict the use of Tax Codes to offices that should not have access to them. If using the Office field to restrict use to an office, you cannot also specify a country in the Restrict to Country field and vice versa. The system will remove the previous selection and keep the most current when you attempt to use both fields.
- Tax % and Reverse Charge % fields - You cannot have both Tax % and Reverse Charge % fields enabled for the same tax code. If using the Tax % field, the system will disable the Reverse Charge % field and vice versa. One of the fields must be 0% to use the other field.
Special Considerations - Taxes in India
When creating a Tax Code for India, select India in the Restrict to Country field and you will find 3 additional sections below the fields:
- Tax Percentages
- Input Tax GL Accounts
- Output Tax GL Accounts
Click on each section heading to expand the section.
Tax Percentages Section
You can specify the percentages for CGST, SGST and IGST. The total of the 3 tax percentages must equal to the percentage specified in the Tax % field in the General Options section of this page.
Input Tax GL Accounts Section
Use these fields to have the system post input tax to separate GL accounts for CGST, SGST, and IGST. If left blank, the system will use the default Input Tax GL Account specified in the General Options section or the default posting accounts here.
Output Tax GL Accounts Section
Use these fields to have the system post output tax to separate GL accounts for CGST, SGST, and IGST. If left blank, the system will use the default Output Tax GL Account specified in the General Options section or the default posting accounts here.
