Double taxing

[frozenjim]

To charge double tax; that is, 5% federal and then 7.5% provincial on the
cost of the item PLUS the cost of the federal tax (Poor over-taxed
Canadians), Derek presented a great solution:


Derek Atkins wrote:
> 
> In short, create a tax table with two entries:
> 
>   Tax1 (x%)      x%
>   Tax2 (y%)      (1+x%)*y%
> 
> So in your case:
> 
>   TPS (5%)       5%
>   TVQ (7.5%)     (1+5%)*7.5% = (1.05)*7.5% = 7.875%
> 
> Works great! 
> 
> 

I am also wrestling with this issue.  If I'm hearing this correctly then I
just need to ensure that there are the appropriate liability accounts in
place to handle it all.  From a great tutorial 
http://linas.org/mirrors/www.aerospacesoftware.com/2003.06.21/GNU_Cash_for_Business_users_Howto_Guide.html
Gnucash for Business Users Guide  I learned to create the GST (which is
called TPS in Quebec) Liability Account with two sub accounts: 

  GST/TPS (Liability)
    -> GST Collected (liability)
    -> GST Paid (liability)

So now I'm guessing I need to also create a TVQ/PST account in exactly the
same way.

 TVQ/PST (Liability)
    -> TVQ Collected (Liability)
    -> TVQ Paid (Liability)

So, while you have given a technical response that appears to be the right
answer, are you able to tell me if what I am doing with my chart of accounts
is valid from an accounting angle?  I am very new to this but I think I'm
starting to get it.
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