This section describes how to balance your tax accounts as part of your end of month closing.

The basic rule in EE Financials for tax accounts is that any postings from AR, AP, purchasing, or journal entries must have PostingVAT records associated with them.

The following is the business case for the accrual and payment of taxes.

There is a perceived need to transfer the net balance of input and output tax (and, potentially, other taxes that can be offset, for example, advanced corporation tax) to a single account to hold the accrued liability to the tax authorities.

You can pay these taxes against the separate tax accrual account using the existing payment functions or by journal entry, when offsetting against other taxes. The tax accrual account is normally set up as a standard GL account.

This slide outlines the approach for creating offset accounts.

This approach is consistent with that followed in other functions that update tax accounts, such as GL Consolidation, and Year-End Closing Execute, both of which already use dummy tax codes when making postings to tax accounts:

The approach outlined on the slide is recommended.

Create a separate set of parameters:

You can use the Trial Balance View to view tax account balances.

The slide shows journal entries used to net tax account balances.