Sales Taxes / VAT

Recording sales taxes in Bkper lets you see your tax receivable or payable balance at any moment. The approach depends on whether tax is included in the sales price or added on top of it.

Taxes included in the sales price

When the tax is already embedded in the price, each purchase or sale is recorded at the full amount first. A second transaction then reserves the tax portion into a dedicated tax account.

Tax on purchase

Record the purchase at the full price, then reserve the tax portion from the expense into the Tax In account.

Tax on sales

Record the sale at the full price, then reserve the tax portion from revenue into the Tax Out account.

Tip

These examples use simplified cash basis for easy understanding. You can also set up more complex tax flows involving accounts payable and accounts receivable instead of a direct bank account.

Settlement

Close the sales tax period by balancing Tax In with Tax Out to calculate the amount due (or receivable).

Taxes not included in the sales price

When the tax is added on top of the sales price, the purchase or sale is recorded at the net amount. A separate transaction records the tax portion.

Tax on purchase

Record the purchase at the net price, then record the tax amount separately into the Tax In account.

Tax on sales

Record the sale at the net price, then record the tax amount separately into the Tax Out account.

Settlement

Close the sales tax period the same way — balance Tax In with Tax Out to determine the amount due or receivable.

You can automate sales tax transactions with the Bkper Tax Bot.

Caution

These are general and simplified examples of recording sales taxes. Always consult your local tax specialist on how to record sales taxes correctly in your bookkeeping.