Invoiced tax versus 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 affect your taxable transactions. That is, whether they are invoiced or accrued.

It is important to consider this decision carefully. Do 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 added to a product or transaction. The final user/consumer actually pays the tax.
Goods and services tax	Invoiced tax	You can use tax on goods and services that you bought from Canada, Federal level, to calculate a tax on a tax.
Provincial sales tax	Invoiced tax	Tax on goods and services you bought from Canada, provincial level.
Use tax	Accrued tax	Tax that is imposed on the use, storage, or consumption of property after a sale.