Are you sure Wave implementation is safe? What happens when you receive money from customer, then customer asks for refund so you refund them. Does Wave knows the tax included in refund to customer is recoverable even though the tax is marked as non-recoverable? Because I just tested this scenario with “Prepaid income” liability account and Wave was still showing I owe the tax even after refunding customer. This is what you want me to implement? Don’t think so.
So I repeat again. If you are purchasing something from supplier and the amount is CST inclusive, don’t set any tax code on that transaction as CST is not recoverable in that context. Why is this a problem to leave the tax code field blank? I don’t get it.
This is how i will solve this CST problem, i would just create an expense account (CST) and a liability account (CST liability) and calculate the tax percentage on sales and make a journal Entry every period of reporting. though this report wouldnt show at the tax summary it cool.
Or I would create a tax code and apply it only during sales.
Lubos is that okay please.
@Abeiku, there is no such a thing as CST expense account. If you want to record CST liability by journal entry, you should reduce balance of relevant income accounts such as Sales. But don’t use journal entries for this anyway. It’s too error-prone.
Create CST tax code and apply it only during sales. Don’t use CST tax code on purchases. Before you lodge your CST figures, you can run Tax Audit report to verify you didn’t use CST tax code on any expense accounts by accident.
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