Moveware automatically keeps track of input and output tax credits. Different types of value added taxes can be setup to calculate automatically when used in transactions.

These can be reported on at the end of the financial period to assist in the reconciliation of tax for reporting to the appropriate authority.

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Mechanism

In Moveware > Setup > Tax Codes the different Tax types are setup with rates, linked accounts, date period and specified branches etc.

Importantly, the General ledger account subcode is specified to allocate the transaction to the correct taxaccount.

If a specific type of tax (such as an Insurance Tax) is not required to be reported to the authority then it can be excluded by selecting the “exclude in tax reporting” checkbox.

For more information  see Tax Codes Screen.

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Reporting

The primary reports that Moveware recommends to assist in collating and reporting on value added taxes are

•The Tax Summary report in General Ledger Reports

•The Balance Sheet report in General Ledger Reports

•The Tax Summary report

The Tax Summary report gives and overview of the tax on transactions throughout a given period, detailing each transaction and the amount of tax on each. The totals are broken down to a specific taxgroup, making data collection and reporting easier for the user when transferring the totals to the reporting sheet.

Some data manipulation needs to be done before reporting the amounts to the Taxation Authority. The system marks payments to the Taxation Authority with an asterisk. They must be added back to the total tax paid and collected.

Other transactions may need to be excluded from reporting, depending on your regions reporting laws. These items can include payroll tax collected, superannuation and other various taxation liabilities.

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The Balance Sheet Report

When reporting tax throughout the financial year, the balance sheet can be used as a quick reference to show the total tax liability owing to the taxation authority, including payroll tax collected. Importantly, it can also be used to show the available resources on hand that can be used to cover those debts.

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Recording Tax Payments

Moveware recommends setting up the relevant taxation authority as a Supplier and creating a Supplier invoice for each reporting period or remittance. This restores those balances back to zero for the quarter, but also keeps a historical record of transactions for future reference. The taxation authority as a supplier can then be paid from the relevant banking account as one would for any other supplier.

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