Sorry for the long post below, but I really need some help here as I've gone live with FA for business and don't want to end up with wrong entries and accounts.
I'd be thankful if someone can help me set up/ confirm my understanding below with regards to Company Setup / Tax Period / Tax Last Period
My VAT period is quarterly and it run as below:
Should I use:
Tax Period =3
Tax Last Period = 1 ( ideally I have a month before I pay/collect the tax from tax office, but I can do it anytime in next 3 months)
mind it, I have an odd fiscal year which runs from 29/July/2017 to 28/July/2018
I read below on wiki and have a few questions:
Using the Tax System
1. After you have setup your Tax System it is time to explain how to use the Tax System in practice.
2. Let us say, that you have a Tax Reporting Period of 1 month and you have to report this per the 15th of the following month.
3. Then you will run The Tax Report somewhere between the 1st and the 15th of the following month.
4. Let us say that you have to report the Tax on Feb, 15. You run a Tax Report, and if you have set the period value and the months back value to 1 in the Company Setup, FA will suggest the period 01/01/2010 to 01/31/2010. Print out this report.
5. Before we go any further, it is time to consider how the Tax Transaction Details are collected. They are kept inside a table, called tax_trans_details. This table also holds the tax details for all documents and quick entries.
6. To avoid booking The Payment directly against the Tax Accounts, we should create or use an Accrued Account for our Tax collection.
Question Do i have create a GL account for this Accrued Account for Tax collection ???
7. So per 01/31/2010 we would enter a JE where we empty the Tax Accounts and counter book them on the Accrued Tax Account.
Question How exactly do I emtpy the Tax Accounts and book them on Accrued Tax ??? I have created a different types of taxes and few GL accounts for each of the taxes, do I post credit/debit entries with each of this tax accounts and Accrued Tax account (at this point I believe I do have to create a new GL account for Accrued Tax collection)
And am I correct that once I emtpy the tax accounts in to Accrued Tax account, they'll be empty ? Or would they be emptied on basis of above 'tax perioed' / 'tax last period'?
8. Now, when you pay the Tax via Bank Payment, you debit this Accrued Tax Account and your bank account is credited.
9. If you should have a Tax collect, you would of course use the Bank Deposit instead, and book the other way round.