Recording Tax for Manually Created Journal Transactions

The Journal Entries form allows you to define a journal entry transaction as a tax amount. These tax amounts can then be reported on the EU VAT Report or VAT Report.

Specify the accounts for which tax transactions can be created from manual journal entries.

See Defining the Accounts that Can Have Tax Records Created.
Specify the tax amounts in journal entries.

To specify a journal entry that includes tax:
1. On the Journal Entries form, create a manual journal entry transaction into the General journal, or another user-defined journal.
2. Select Taxable. This indicates that the transaction uses the Tax Code or the Exempt Code from the Account Tax Code Defaults form that is specified for the account. When this field is selected, the Tax Amount and Total Amount fields are disabled and any values in them are deleted.
Or, to specify a tax amount as a separate journal entry transaction:
1. On the Journal Entries form, create a manual journal entry transaction into the General journal, or another user-defined journal.
  
  Note: The account you specify for this type of transaction must be set up on the Account Code Tax Defaults form.
2. Select Taxable. This indicates that the transaction uses the Tax Code or the Exempt Code from the Account Tax Code Defaults form that is specified for the account.
3. Select Entry is Tax. to indicate that the journal entry you are creating is an entry for the actual tax amount. When this field is selected, the Tax Amount and Total Amount fields are disabled and any values in them are deleted.
4. Specify the Tax Code. (The Tax Account is not used.)
  
  If the tax amount is automatically calculated, the amount is calculated as the debit or credit amount, multiplied by the tax rate of the tax code. The journal transaction created for the tax record is for this amount. If a debit amount is entered, this value is a debit amount. If a credit amount is entered, this value is a credit.
Save your changes.