Capture tax in a journal entry

You can capture tax in journal transactions. For example, you need to use a journal transaction to enter taxes for the following:

• Luxury car tax

• Motor vehicle acquisition

• Wine equalization tax (WET)

• Withholding tax

Entering a taxable transaction is just like entering a transaction without tax, except that you select a tax detail—the tax category and associated tax rate.

The following steps highlight the fields needed to capture tax. For more detailed information, see Create a journal entry and the field descriptions.

1. In the header, select a tax implication:
   • Inbound taxes for purchases. Select this option to associate the journal entry with a purchase transaction.
   • Outbound taxes for sales. Select this option to associate the journal entry with a sales transaction.

   The Entries section changes to include columns for the tax information.

2. Select the Tax solution for calculating the tax if either of the following are true:
   • Your company is configured for multiple tax jurisdictions
   • You're entering the journal entry at the top level

   Otherwise, the field is read-only.

3. Optionally, select a Supplieror a Customer, depending on whether you selected inbound or outbound taxes.

   The Contact field is automatically populated with the pay-to contact of the selected supplier or the ship-to contact of the selected customer.

   Selecting a supplier or customer is not required. If you do not select a supplier or customer, you can enter Withholding Tax or a GST adjustment.
4. If your company does not use multi-currency:
   1. Enter a line for the Debit amount and a line for the Credit amount.
   2. Select the appropriate Tax detail for the debit or credit line, but not both. The Rate and Transaction tax are automatically populated.
   3. To balance the entries, add the amount of the Transaction tax to the amount of the Debit or Credit field to which no tax was applied. This is the line that does not have a tax detail selected.
5. If your company is enabled for multi-currency:
   1. Enter a line for the Transaction debit amount and a line for the Transaction credit amount.
   2. Select the appropriate Tax detail (category and related rate) for the debit or credit line, but not both. The Rate, Transaction tax, and Total base debit (or Total base credit) fields are automatically populated.
   3. To balance the entries, add the amount of the Transaction tax to the amount of the Transaction debit or Transaction credit to which no tax was applied. This is the line that does not have a tax detail selected.
      You can also check the Total base debit and Total base credit fields to see if the entries balance.