Invoiced versus accrued tax

There are two types of taxes in the Tax solution: invoiced tax and accrued tax.

An invoiced tax represents an increase to the transaction amount. An accrued tax has no effect on the transaction amount, it is non invoiced.

At the tax company or tax code level, you decide how tax codes will affect your taxable transactions. That is, whether they are invoiced or accrued.

Note: Consider this decision carefully. You should not change back and forth from invoiced to accrued because making sudden tax changes affects postings to the general ledger.

This table shows several examples of invoiced and accrued taxes.


Tax name	Type of tax	Description
Value-added tax	Invoiced tax	Tax that is imposed on the value that is added to a product or transaction. The final user, also known as consumer, pays the tax.
Goods and Services tax	Invoiced tax	Tax on goods and services that you bought from Canada, at the federal level. You can calculate a tax on a tax.
Provincial Sales tax	Invoiced tax	Tax on goods and services that you bought from Canada at the provincial level.
Use tax	Accrued tax	Tax that is imposed on the use, storage, or consumption of property after a sale.