[GNC] automatically account for gst on random purchases

[flywire]

On Tue, 20 Jun 2023 at 10:58, David Cousens <davidcousens49 at gmail.com>
wrote:

> AFAIK the tax tables work only with with invoices. As not all items are
> necessarily subject to GST in all business situations in AU. It would be
> difficult to automate it because of this and similarly with applying it to
> imported transactions,  GnuCash has no way of knowing what items are
> subject to GST and which are not.  I haven't had to do GST returns since
> 2014 when I retired but if my memory serves me  I had to creatte invoices
> for any requiring GST  or manually enter it myself.
>
> David
>
> https://lists.gnucash.org/pipermail/gnucash-user/2023-June/107428.html
> flywire wrote:
> > ...
>

USA user comments tend to imply GnuCash uses a USA Point-Of-Sale model for
Invoicing and Billing. Attaching the tax code to the income/expense account
(like Quickbooks) would be much more efficient for other countries like
Australia.

As David noted above tax might not be simple. While most Australian
businesses apply GST, normally 10%, some are input taxed so they cannot
claim the GST on those enterprises, and businesses may have both types of
enterprises. For example, a farm business might have to split fuel by
enterprise if say the farm enterprise pays and collects GST and the
business also rents worker residential accommodation enterprise paying GST
it is not entitled to claim, collect, or have any reason to account for.

Businesses aim to make money and GST is charged on that money so it follows
GST is a liability. Another nice thing Quickbooks does contrary to the
Guide is place all the GST accounts under liabilities so the net result is
clear from the parent account at any time. [Liability:GST:GST on Sales (ie
tax collected) and Liability:GST:GST on Purchases (ie tax paid).]

I'm going to come back with a preprocessing solution but it could be done
directly and more efficiently by the importer using the tax table.

---------------------------------------------------------------------

I'll close this post with most steps for the Minimal Working Example based
on inconsistent documentation previously linked:

Run GnuCash
File, New
New Account Hierarchy Setup, Next
New Book Options, Next
Choose Currency, Next
Choose accounts to create: Select Business Accounts and Clear Common
Accounts, Finish
Apply
File: GST-Demo, Save As

Actions, New account
Create Assets:GST:GST on Purchases and Liabilities:GST:GST on Sales

Business, Sales tax table
Create tax tables:
 GST on Purchases, Tax table entries: Assets:GST:GST on Purchases
 GST on Sales, Tax table entries: Liabilities:GST:GST on Sales
Close

File, Properties, Business tab
Default Customer Tax Table: GST on Sales, Default Vendor Tax Table: GST on
Purchases

Business, Vendor, New Vendor, Company Name: Random, OK

There is an incredible amount of keystrokes, clicks, and human memory
recall to pay a bill:

Business, Vendor, New Bill, Date Opened:20/06/2023, Vendor: Random, OK
Expense account: Expenses:Auto:Fuel, Quantity: 1, Taxable, Tax included:
Select, Tax Table: GST on Purchases [default]
Enter
Post bill (so it can be paid), OK
Pay, Select Transfer Account: Checking Account, OK

Sample Transaction
Date      Description
    Account                                Debit   Credit
20/06/23  Random
    Expenses:Auto:Fuel                 $3,000.00
    Liabilities:GST:GST on Purchases              $300.00
    Assets:Current Assets:Checking Account      $3,300.00

General Journal
Date      Description
    Account                                Debit   Credit
20/06/23  Random
    Liabilities:Accounts Payable       $3,300.00
    Assets:Current Assets:Checking Account      $3,300.00
20/06/23  Random
    Assets:GST:GST on Purchases          $300.00
    Expenses:Auto:Fuel                 $3,000.00
    Liabilities:Accounts Payable                $3,300.00

Regards