Aruba TAX system

1

Dear Sirs,

In Aruba we have monthly taxes to be paid over de revenue of the month.

For example if we collect 1000 USD on what every we sell, we have to pay 3 different taxes in total 6%.
If there a way to generate an automatic report of this so it will summaries the taxes we pay to the Government?

thank you,
Rob

2

That depends. Is the tax an income tax? If so, Manager has no features for calculating it. And there are no reports related to it. If it is a sales or value added tax, see Create and use tax codes | Manager. When using tax codes, several tax reports are available in the Reports tab.

3

Thank you for the quick reply. Yes it is a sort of income tax. It is not a sales tax.
This is a tax that the entrepreneur should pay and not the customer.

thank you.

4

Can you explain how the tax is calculated?

If it is a % of your sales, then it is a Sales or Valued Added Tax - these can be managed by Manager

All taxes are paid by the customer ultimately - they pay your invoice and if you have then to pay part of that to the government, it is still paid by money you got from thecustomer

5

The fact the entrepreneur pays it rather than the customer precludes its being a sales tax or VAT. But you should be able to file based on your profit and loss statement. The key to making it straightforward is designing your chart of accounts to easily produce the necessary numbers.

6

In the official note from the Aruba Tax office they call this Turnover Tax. This is payable by the entrepreneur. From the 1ste of Jan 2019 it is not allowed anymore to mention this on the Sales invoice to the customer.
This Tax needs to be paid every month. It is 6% (BBO=3%, BAZV=1.5%, BAVP=1.5%) of the turnover. Yes, this has to me mentioned on the P&L. They also call this a cumulative TAX system. As when the supermarket buys at the wholesaler there is the 6% to be paid by the wholesaler. When the supermarket sell the goods, they again pay 6% on the turnover… Yes, on the end the Aruba people pay for this.
If we ‘collect’ the 6% on the sales… we pay at the end of the month 6% on our sales and the 6% collection…
I have tried different ways in Manager to record this to be able to generate a report, but it is not working good for the Aruba system. Anyway it is not difficult to calculate separately, base of a Sales report.

7

Ah…the turnover tax. Handling it in Manager is simple:

  1. Because it cannot be mentioned on a sales invoice, use no tax code to impose this tax on line items. Thus, you will not be collecting it from customers except as part of your pricing structure, the same way you include overhead costs to decide the price of goods or services.
  2. Every month, produce a Profit and Loss Statement for the relevant time period.
  3. From the P&L, add all income accounts that qualify as sales under the regulations. Perhaps this will be only one.
  4. Pay 6% of that amount to the tax authority with your filing.

Normally, you would post the payment of a turnover tax to an expense account created for the purpose. These taxes are usually considered as legitimate expenses of a business. I don’t know the exact rules for Aruba’s turnover tax. Check with an accountant; the tax may be considered a form of income tax on the owner(s) rather than the business.

The reason you will not use tax codes is that Manager’s tax structure is based on taxes collected from customers and paid to suppliers on sales and purchases. These are ongoing and regular taxable transactions. Income taxes, turnover taxes, corporation taxes, and similar taxes are based on the overall results of doing business, so they are calculated based on the Profit and Loss Statement.

As a last note, tax codes can still be used for other types of taxes (if any) levied on customers or paid to suppliers.