Business Insider: Tax Settings

Greetings to all!

In Mr.Accounting, we have Goods & Services Tax (GST) module to comply with GST requirements that started on April 2015.

The addition of GST functions allow tax amount to be automatically calculated for each transaction based on the tax code. The tax amounts are added up and automatically included in the GST-03 form, which can be generated in this module.

There are few steps on how to do tax setting using Mr. Accounting software :

This screen displays the preset tax codes that are based on the recommendation by the Malaysian Customs.

The tax codes can be divided into purchase and supply tax codes. The tax codes under Both are old tax codes for Sales and Service tax which should not be used.

The default preset tax codes, description and tax rates are as below:

Note: Tax codes are only suggested by the government and used for their tracking purposes. It is recommended to use the standard tax codes recommended by the government, but the most important thing is to ensure that the final tax payable/refundable figure is accurate in the GST-03 Return form.

Tax Settings Quick View screen

Transaction (for Tax Settings)

You can use the Transaction button in the Quick View screen to display a list of all transactions with the selected tax code. You may need to use this function to check why there is an outstanding tax amount even after you have reconciled and submitted the GST Return form

A new window pops out showing the transaction history for this tax code as below.

Edit Tax Codes

Double click on tax codes or select a tax code and select Record.

Tax Code: Enter the name of the tax code

Description: Type in a description that will appear in the Quick View and in the magnifying glass selection screen

Tax Rate: This is to configure the tax rate for this tax code. This is used to calculate the tax amount for transactions using this tax code. The current rate is 6% for GST chargeable transactions and 0% for transactions not chargeable to GST.

Tax Category: This is to set which field in the GST Return form that amounts for this tax code are posted to. For example, if you set this to “GST-Std Rated” and “Supply Tax Type” then this amount is posted to the 5a) and 5b) fields in the GST Return.

Tax Type: This categorises the tax code into either purchase or supply. This affects the transactions that you can tax code under. For example, if you select the Supply Tax Type, then this tax code can only be selected under sales (i.e. customer-related) and receipts transactions such as Cash Book Receipt, Sales Entry etc.

General Ledger Posting: This is to set which GL code the amount for this tax code is posted to. This GL code is a control account for input tax/output tax under 3. Liabilities, or disallowed from claiming tax account under 7. Expenses.

Note: The GL posting is not the same as the tax category field above.

GL posting affects the GL code for posting tax amounts in the General Ledger, whereas Tax Category affects which field the amount is posted to in the GST Return form in the GST module.

Show In Search/ In Use for tax codes

Only those Tax Codes that have been ticked for Show in Search will show up when you click on the magnifying glass to select tax codes [see example in Cash Book Payment below].

If Show in Search is ticked, then the In Use column in the Tax Settings Quick View screen will be ticked also.

Tax Link to GL

You can use this function to link a tax code to an income or expense GL code, which means that this tax code is automatically selected after you select the linked GL code.

Example: Link the OP tax code to director fees GL code (an expense item)