Tax Liability Payment Transaction in SuiteTax

Tax liability payment transaction is used to record tax liability payments made to tax authorities. The tax liability amount is based on the GL, which is a summary of all the accounting entries from posting transactions. Payment of taxes can be recorded against the relevant tax authority, for easier reconciliation.

Note:

To be able to use this feature, you must enable the SuiteTax feature. You also need to have an accountant role or a role with the Tax Liability Payment permission.

You can do the following when creating a tax liability payment transaction:

Enter tax liability payments details.
Adjust the tax payable account prior to recording a tax payment.
Process payments to tax authorities only if there is a tax amount due to the tax authorities.

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

Note:

You cannot record tax refunds using the tax liability payment transaction type. The deposit transaction type can be used to record tax refunds.

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. The tax agency is filled in automatically, based on the selected nexus.

Note:
You can select only those 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 enter the related department, location, and class.
In the Tax Payable section, check that the "As Of" date is correctly prefiltered, to show open tax liabilities. Then, select the tax account you want to use for the tax liability payment. The amount you must pay to the selected tax authority appears in the Tax Due field. If needed, you can then make adjustments to the tax due amount by selecting the related adjustment account and entering the necessary adjustment amount. You will then see the final amount you need to pay in the Payment Amount field.
Click Save.

Recording Tax Liability Payments for VAT/GST

To pay VAT/GST liability, you should set up the tax liability before creating 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 any.

Create a journal to set the tax liability.

Note:

This step is not required 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

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

General Notices