Tax Management
Every tax obligation tracked from the ledger and remittable — no manual preparation.
Tax in Trabalance is rule-driven. You define each tax code once — its type, its rate or amount, the base it applies to, and the ledger account it posts to. Documents apply it and post it; the Taxes page then reads your position straight from the ledger, the same figures as your Trial Balance.
Navigate to: Finance → Taxes
Tax Types
| Tax Type | Direction | Who Bears It | Journal Impact | System default account |
|---|---|---|---|---|
| Sales | Collected from the customer on invoices | The customer; you remit it | CR the tax account on the invoice | Sales Tax Payable |
| Purchase | Paid to the vendor on bills | You; recoverable against output tax | DR the tax account on the bill | None — choose the account (Purchases Tax Recoverable is the usual one) |
| Receipt (Withholding) | The customer deducts it from what they pay you | You; recoverable from the authority | DR WHT Receivable + DR Bank (net), CR Accounts Receivable (gross) | WHT Receivable |
| Payment (Withholding) | You deduct it from what you pay the vendor | The vendor; you remit it | DR Accounts Payable (gross), CR Bank (net) + CR WHT Payable | WHT Payable |
The Taxes Page
| Section | What It Shows |
|---|---|
| Tax authority & e-invoicing | Resolved from your business's own country: who you remit to, the filing cadence, the e-invoicing mandate and whether a provider is connected. The taxes it lists are reference only — the rate that posts is always the rate on your own code. "Create code" starts a code with that name and type; you set the rate. If no country is set, the card tells you where to set it. |
| Period | The range every figure below is read for |
| Headline figures | Tax collected on sales · Tax paid on purchases · Net payable · Withholding (received − deducted) |
| What you owe | Per tax account: Codes posting here, Charged in period, Settled in period, Outstanding now, Position (You owe / Recoverable), and Record payment for a payable balance |
| Codes with no account | A warning naming each code that has no ledger account — its tax sits on documents and never reaches the books until you assign one |
| Tabs | All · On sales · On purchases · Withheld from us · Withheld by us |
| The list | Name · Type · Rate · Ledger Account ("Default" when the type's system account is used) · Documents · Total Tax · Status |
New Tax opens the Create Tax modal; clicking a row opens the code's page with its documents.
Creating a Tax Code
The Create Tax modal has four sections — Tax Type, Tax Details, Ledger Account, Advanced Settings. The full field reference is on Tax Rates.
| Field | Details |
|---|---|
| Tax Type | Sales · Purchase · Receipt (Withholding) · Payment (Withholding). Withholding types show an explanation of how they reduce cash. |
| Tax Name | Placeholder "e.g., VAT, WHT, Sales Tax" |
| Method | Percentage of a base, or Fixed amount |
| Rate (%) / Amount | 0–100 as a percentage, or an amount per document or line |
| Applies to | The document's gross total, or the value excluding other taxes |
| Effective from | Leave empty for today. Documents keep the rate in force on their own date. |
| Ledger Account | "Use the system account for this tax type", or a specific account (Recommended first, then All Accounts). A Purchase tax has no system default and must be given an account. |
| Advanced | Compound Tax and Tax Inclusive — see below |
Withholding Tax — How It Works
Withholding tax is collected at the point of payment. The cash moves net; the gross obligation stays in the books; the withheld portion posts to a holding account.
Scenario: You invoiced Global Trading Ltd 10,000.00. They apply 10% WHT and pay 9,000.00.
| Account | Debit | Credit | Description |
|---|---|---|---|
| Bank | 9,000.00 | — | Net cash received |
| WHT Receivable | 1,000.00 | — | Withheld by the customer — your credit against the authority |
| Accounts Receivable | — | 10,000.00 | The invoice is cleared in full |
Scenario: Acme Supplies Ltd billed you 20,000.00. You apply 10% WHT and pay 18,000.00.
| Account | Debit | Credit | Description |
|---|---|---|---|
| Accounts Payable | 20,000.00 | — | The bill is cleared in full |
| Bank | — | 18,000.00 | Net cash paid |
| WHT Payable | — | 2,000.00 | Withheld on the vendor's behalf — remit to the authority |
Remitting
Record payment on the What you owe row opens the expense form. An expense whose category is the tax liability account posts DR the liability, CR the account you pay from — so your position and your books move together.
| Account | Debit | Credit | Description |
|---|---|---|---|
| WHT Payable | 2,000.00 | — | Liability cleared |
| Bank | — | 2,000.00 | Cash paid to the authority |
WHT Payable and Sales Tax Payable are not your money. Monitor What you owe before each filing deadline.
How Tax Flows Through a Document
| Step | Where | What Occurs |
|---|---|---|
| Code created | Finance → Taxes | Type, rate or amount, base and account defined once |
| Applied to a line | Invoice / Bill form | The tax is calculated at the code's rate and shown on the document |
| Document created | Sales / Purchases | The journal posts, including the tax line to the code's account |
| Position read | Finance → Taxes | What you owe reads the tax accounts from the ledger for the chosen period |
| Remittance | Record payment → expense form | DR the tax liability, CR bank |
Compound Tax and Tax Inclusive
Both are settings stored on a code under Advanced Settings and shown as pills on its page. Compound Tax is described as "Calculate this tax on top of other taxes"; Tax Inclusive as "Prices include this tax by default". At present the document forms calculate tax on the line amount at the code's rate and base regardless of these flags — treat them as labels on the code rather than as a change to how a document's totals are computed.
Related
- Tax rates — defining a tax code
- Withholding tax — both directions of WHT
- Chart of Accounts — the classification system every report draws from
- Journal Entries — the Journals page and its tabs