Tax Setting

Tax Settings

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

1. Tax Amount: This is the total tax that has not been reconciled and submitted in the GST Return.

2. In Use: see below

3. Include Submitted Transaction: Tick to include transactions that are already submitted in the GST-03 form

4. Transaction: see below

5. Print a summary of tax codes details (tax code, description, tax rate, input and output GL code etc)

6. Delete the tax code (be careful not to delete important tax codes)

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.

Step 1: Select the tax code that you want the history for (e.g. SR)

Step 2: Select the date range to be included

Step 3: Select the Transaction button

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.

Example: edit TX tax code under Purchase Tax

1. Include in GST Return: Tick to include the amount for this tax code in the GST Return form

2. Tax Memo: This provides an explanation of the tax code

3. Tax Link to GL: see below

4. Show in Search: see below

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].

1. These tax codes all have “Show in Search” ticked. If not ticked, they will not show up here.

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)

Step 1: Double click on the OP tax code to edit

Step 2: Select GL code [in red box] to link with the tax Code using magnifying glass (e.g. 71300 Directors Fees)

Note: You can use the Add and Remove buttons to add and remove GL codes from this list.

Step 3: Save the transaction

After you have linked the tax code (OP) to director fees (71300):

When you select Director Fees as 71300 in GL code in Cash Book Payment, then the Tax Code will be automatically set to OP.

Step 1: Enter 71300 in GL Code

Step 2: Tax words will be blue and Tax Code automatically set to OP

This prevents you from using the wrong tax code for that GL code, and saves you data entry time.