Tax Liability Payment Transaction in SuiteTax

Use a tax liability payment transaction to record tax liability payments you make to tax authorities. The amount is based on the GL, which summarizes all the accounting entries for the selected nexus and subsidiary. You can record tax payments against the relevant tax authority for easier reconciliation.

Note:

The Tax Account field lists current liability accounts linked to the selected subsidiary. You can only pick accounts with the same currency as set in the subsidiary's base currency, or accounts without a currency.

Note:

To use this feature, you'll need to enable the SuiteTax feature and have an accountant role or a role with the Tax Liability Payment permission.

When you create a tax liability payment transaction, you can:

Enter tax liability payments details.
Adjust the tax payable account prior to recording a tax payment.
Process payments to tax authorities only if you owe tax.

You can create tax liability payment transactions to settle U.S. sales tax, VAT, and GST, and you can also void and delete tax payment transactions.

Note:

You can't record tax refunds using the tax liability payment transaction — use a deposit transaction instead.

Viewing Tax Liability Payments

To view your tax liability payments, go to Transactions > Bank > Create Tax Liability Payment > List.

Note:

If you've migrated from legacy tax, the list includes the tax payments made before you enabled SuiteTax. These migrated transactions are read-only.

Recording Tax Liability Payments for U.S. Sales Tax

To create a tax liability payment transaction for U.S. Sales Tax:

Go to Transactions > Bank > Create Tax Liability Payment.
In the Primary Information section, enter the payment details, such as the nexus, the bank account, the date and the posting period. NetSuite fills in the tax agency automatically based on the selected nexus.

Note:
You can only select bank accounts with the same currency as set in the related subsidiary.
In the Classification section, select the related subsidiary. The subsidiary is prefiltered based on the selected nexus. You can also the department, location, and class.
In the Tax Payable section, ensure that the "As Of" date is correct to show open tax liabilities. Then, select the tax account for the tax liability payment. The Tax Due field shows what you owe to the selected tax authority. If needed, adjust the tax due amount by picking the related adjustment account and entering the adjustment amount. You'll then see the final amount to pay in the Payment Amount field.
Click Save.

Recording Tax Liability Payments for VAT/GST

To pay VAT/GST, set up the tax liability before you create the tax payment transaction.

To set up the tax liability for VAT/GST:

Generate reports.
1. Standard tax report (summary and detail) for the relevant subsidiary, nexus, and reporting period.
2. General ledger report for both the VAT on sales and VAT on purchases GL accounts. This report is used to review and validate the balances for the relevant subsidiary and reporting period.
3. Localized tax report, if you have one.

Create a journal to set the tax liability.

Note:

You don't need this step for US sales tax payments.

If the total VAT on sales is greater than the total VAT on purchases, create a journal to record the VAT liability.
Select the nexus associated to the VAT liability being recorded.

For example:

Total VAT on sales for the reporting period = 5,000
Total VAT on purchases for the reporting period = 4,000

Total VAT liability for the period = 1,000 (this is the tax due for the reporting period)

Account	Debit	Credit
VAT on sales	5,000	—
VAT on purchases	—	4,000
VAT liability	—	1,000

Then you can create the tax liability payment transaction. To create this transaction type, see Recording Tax Liability Payments for U.S. Sales Tax.

General Notices