This could be done using existing implementation of Manager but you have to be careful during tax code selection on each line so there are chances of error like on the last line i dont think you can apply GST 18% to some kind of discounts(which would decrease the GST amount) but you have to reduce the Advance tax for that discount.
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@shahabb from all the information I’ve gathered, it seems like advance tax is basically a compound tax.
So it works like GST but this tax is on GST-inclusive amount.
If GST is 18% and advance tax is 2.5% on GST-inclusive amount, then advance tax rate is actually 2.95% because:
2.5% * 1.18 = 2.95%
Such a tax code should be set up like this:
Since GST 18% and advance tax 2.5% are payable to different tax authorities, you will want different accounts collecting the tax
- GST Payable
- Advance Tax Payable
When using this tax code on invoice, then the invoice will look like this:
Does this work?
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Yes, this works, and this is how i explained in the Post#5 to the OP to handle this. There is also something user need to be careful about as we are calculating this on Line level rather than total
Also one more thing we need separate tax component to report per line which is not possible rn and also required for einvoicing.
There are some suggestions i have made in Post#2. Are any of those going to be implemented in future?
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Hi @lubos thanks for your input, this seems to be a workaround as there are multiple values of Advance tax for different customers i.e 2.5% and 0.5%. also we need to submit separate report of Advance tax to FBR, is there anyway to generate a report for Advance tax for a specific month?
just for your info, Pakistan Government has made it unnecessarily complicated here, there are four type of customer
- Type A: GST 18% + Advance Tax 0.5%
- Type B: GST 18% + Additional GST 4% + Advance Tax 0.5%
- Type C: GST 18% + Additional GST 4% + Advance Tax 2.5%
- Type D: 0% (Exempt from all taxes)
So in monthly report of invoices which we send to FBR, we need to show each kind of taxes in separate column, e.g. for Type C customers there will be three columns (GST , Additional GST , Advance Tax), and to split the total amount to these three amounts is not easy in excel, if you could advise or develop something within software to split all kind of payable taxes in a report that will be very helpful for all of us in Pakistan.
Also please advise if there is a way to assign a tax code e.g. Type A (GST 18% + Advance Tax 0.5%) to Type A customers, so we don’t have to select it manually every time we are creating invoices, as there are hundred of invoices on daily basis.
First you need to Create Balance sheet accounts for General Sales tax (If you want separate account for Further tax you can create it but that amount also goes to Sales Tax authority so no need) and Advance Income Tax. This can be done Settings-Charts of Accounts- New Account.
Then Go to Tax Codes
For each type create a separate tax code
For Type A
For Type B
For Type C
For Type D
I hope this helps those who are having issues in settings tax codes.
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If you want something specific that can be generated by creating reporting categories and report transformation.
Program shows total for each tax component after the subtotal but not on line level (where it shows total of each tax code). I hope this is made optional as it was once done like this but then changed again.
Currently its not possible and i don’t think this will be implemented anytime soon as Tax code could be auto filled per item, you can have different tax code for different items, but you cannot link it to Customers.
There maybe a way to make “Multiple rate” tax codes behave like three different single rate tax codes with a separate liability account and associated reporting for each component.
There was a way of grouping tax codes which was used for report transformation when new tax codes / rates replace a prior rate. I forget the details as I didn’t need to use it.
If it is not possible perhaps a different solution or enhancement maybe added for jurisdictions requiring multiple tax codes per line item and reporting to their tax authority (eg India, Pakistan, USA). As I don’t run business in those countries I may not be best placed to find an optimal solution.
I have suggested a system which internally uses multiple line level tax codes for all taxes but has a user interface allowing data entry and display at line or transaction level (invoice / payment / receipt). Added withholding tax support for purchase invoices - #26 by Patch and the idea thread Tax Withholding Percentage - #27 by Patch The idea was not popular but hopefully there is some other way of achieving the required flexibility and reporting for those who need it.
Currently there is only one way of grouping tax codes and thats through reporting categories and i think those categories are only used in report transformation. You can select those for separate tax component (Tax amount category) and also for the tax code (Net amount category)
I have suggested something similar to your suggestion in Post#2.
This would also improve reporting on tab line level. Where you can select each tax code as column (Like custom fields) and the tax amount would show infront of each line rather than different lines.