Set up custom VAT or GST taxes

Set the locale language for your country

The locale language determines the terminology that's displayed.

To set the locale language, go to Company > Setup > Company. Select Edit and, in the Global settings section, select Language.

Learn more about Terminology across locales.

Set the accounting method

Select Accrual only for the accounting method. The Taxes application supports accrual accounting and the accrual side of dual-method accrual and cash basis accounting. Cash basis accounting is not supported.

Enter a VAT registration number and operating country

Ensure a VAT registration number and operating company have been entered on the Company Information page. The number that you enter must be the number that's registered with the tax authority for your country. If you change the VAT registration number after you start entering taxable transactions, your tax submissions will be incorrect.

Learn more about editing company information.

Create at least one GL account to capture taxes when transactions are posted to the GL. Typically, a liability account is used.

When you configure the tax solution in a later step, you'll specify which GL account to use for the tax details for input taxes and the tax details for output taxes. You can edit the tax details later to change the GL accounts, if needed.

When your company was provisioned, the Taxes application was added to the subscriptions list. Enable the Taxes application if it hasn't already been enabled. (Go to Company > Admin > Subscriptions and then click the Taxes icon.)

Configure the Taxes application to support either a single tax jurisdiction or multiple tax jurisdictions.

If you select Single tax jurisdiction, select Custom VAT.

Learn more about configuring Taxes.

Grant the Taxes permissions for Tax Solutions to the users who will configure tax solutions in your organization.

Learn more about granting permissions to users.

If the Taxes application was configured for Single tax jurisdiction, edit the unconfigured tax solution to enter and save the configuration options:

1. Go to Taxes > Setup > Tax solutions.
2. Select Edit next to Custom VAT - [Not configured] Preinstalled tax solution for VAT.
3. Change the Description if you like.
4. Select the Submission process. User-submitted lets you create manual tax submissions for the tax solution.
5. If you selected the User-submitted submission process, select the Start date of the first tax submission period.
6. Select Save.
   

If the Taxes application was configured for Multiple tax jurisdictions, add a custom VAT solution:

1. Go to Taxes > Setup > Tax solutions.
2. Select Add.
3. Enter a Tax solution name and select VAT or GST for Tax engine.
4. Select the Submission process. User-submitted lets you create manual tax submissions for the tax solution.
5. If you selected the User-submitted submission process, select the Start date of the first tax submission period.
6. Select Save.
   

Learn more about configuring tax solutions.

Create the tax objects that are needed to calculate the tax in this order:

1. Contact tax groups—Taxes application for suppliers and customers
2. Item tax groups—Taxes application
3. Tax details—Taxes application
4. Tax schedules—Taxes application
5. Tax schedule maps—Taxes application

You can create these objects in the product interface or by importing them.

To learn about the interaction of these tax objects and how tax schedule maps drive the tax rates that are applied, see Tax schedule maps—Taxes application.

To capture and report tax correctly, set the following attributes for each customer before any transactions are created:

• Tax number (Tax ID, ABN, or VAT registration number)—only needed for customers who are VAT or GST-registered
• Taxable
• Item contact tax group

For General Ledger and Accounts Receivable transactions, the contact tax group associated with the customer ship-to contact is used to filter which tax details (rates) users can select for each line item.

For Order Entry transactions, the contact tax group associated with the customer ship-to contact is used to determine which tax details are automatically chosen and applied to calculate the tax per line item.

If a customer's ship-to contact is the same as the primary contact, entering a tax number for the customer (when appropriate), marking the customer as taxable, and assigning the customer to a contact tax group is sufficient. If the ship-to and primary contacts differ, make sure the ship-to contact has a tax number (when appropriate), is marked as taxable, and is assigned to a contact tax group.

Learn more about adding or editing customers and editing contacts.

Instead of manually editing customer information or contact information, you can import customer information to define the primary contact and ship-to contact attributes. Learn more about importing customers.

Required for:

• General Ledger
• Accounts Receivable
• Order Entry

To capture and report tax correctly, set the following attributes for each supplier before any transactions are created:

• Tax number (Tax ID, ABN, or VAT registration number)—only needed for suppliers who are VAT or GST-registered
• Taxable
• Item contact tax group

For General Ledger and Accounts Payable transactions, the contact tax group associated with the supplier pay-to contact is used to filter which tax details (rates) users can select for each line item.

For Purchasing transactions, the contact tax group associated with the supplier pay-to contact is used to determine which tax details are automatically chosen and applied to calculate the tax per line item.

If a supplier's pay-to contact is the same as the primary contact, marking the supplier as taxable and assigning the supplier to a contact tax group is sufficient. If the pay-to and primary contacts differ, make sure the pay-to contact is marked as taxable and is assigned to a contact tax group.

If a supplier's pay-to contact is the same as the primary contact, entering a tax number for the supplier (when appropriate), marking the supplier as taxable, and assigning the supplier to a contact tax group is sufficient. If the pay-to and primary contacts differ, make sure the pay-to contact has a tax number (when appropriate), is marked as taxable, and is assigned to a contact tax group.

Learn more about adding or editing suppliers and editing contacts.

Instead of manually editing supplier information or contact information, you can import supplier information to define the primary contact and pay-to contact attributes. Learn more about importing suppliers.

Required for:

• General Ledger
• Accounts Payable
• Purchasing

To capture and report tax correctly in an Order Entry or Purchasing transaction, items need to be marked as taxable and assigned to an item tax group before any transactions are created.

Learn more about adding or editing items.

Instead of manually editing item information, you can import item information. Learn more about importing items.

Required for:

• Order Entry
• Purchasing

Create a document template to use for printed tax or sales invoices in Accounts Receivable and Order Entry. You can use the samples that Sage Intacct provides for Australia GST, Canadian Sales Tax, South Africa VAT, or United Kingdom VAT as a starting point:

• AR Tax Invoice Sample (country-enabled)
• OE Tax Invoice Sample (country-enabled)

These sample templates are designed to show VAT or GST separately on each line. The templates for South Africa are specialized to include specific wording to comply with South Africa requirements.

Learn more about creating printed document templates.

Required for:

• Accounts Receivable
• Order Entry

You assign printed document templates to AR sales invoices on the Configure Accounts Receivable page:

• Go to Accounts Receivable > Setup > Configuration.
• Scroll to the Formatting section. In the Printed document templates subsection, select the applicable printed document template from the Invoice dropdown list.

You can also assign printed document templates for specific customers. Templates assigned to customers will override the default template specified on the Configure Accounts Receivable page.

Learn more about assigning a printed document template to a transaction or customer.

Required for:

• Accounts Receivable

To post VAT or GST in transactions to the GL, you need at least one Order Entry transaction definition with these attributes:

• The Enable subtotals checkbox is selected.
• One subtotals line is configured for tax. Make sure that only one line in the transaction subtotals table is marked as Is Tax (taxes get calculated twice if you have more than one line marked as Is Tax). If one line is not configured for tax, no taxes will be calculated for the transaction.
• The Transaction posting is to Accounts Receivable or the General Ledger. Unless you have other workflow needs, you typically post to the GL through the AR subledger and not directly.
• The applicable printed document template is selected from the Printed document template dropdown list.

When a transaction that uses this transaction definition is posted, VAT or GST is posted to the GL. You can also print or email a compliant tax or sales invoice.

Learn more about creating or editing Order Entry transaction definitions.

Required for:

• Order Entry

To post VAT or GST in transactions to the GL, you need at least one Purchasing transaction definition with these attributes:

• The Enable subtotals checkbox is selected.
• One subtotals line is configured for tax. Make sure that only one line in the transaction subtotals table is marked as Is Tax (taxes get calculated twice if you have more than one line marked as Is Tax). If one line is not configured for tax, no taxes will be calculated for the transaction.
• The Transaction posting is to Accounts Payable or the General Ledger. Unless you have other workflow needs, you typically post to the GL through the AP subledger and not directly.

When a transaction that uses this transaction definition is posted, VAT or GST is posted to the GL.

Learn more about creating or editing Purchasing transaction definitions.

Required for:

• Purchasing

For multi-entity organizations, you want to ensure that your entities are defined correctly with the appropriate tax solution, operating country, and VAT registration number.

See Finalize tax solution setup.