How to set up VAT deductions on balance sheets

Setting up VAT reporting in your Balance Sheet

If you need to report VAT deductions on purchases and sales, follow these setup instructions


Written by Success-Team

Updated over a week ago

To separate taxes you've collected or paid from your balance sheet and profit & loss statement.

First, head to your tax settings


And edit Settings for Vat return


Make sure your two VAT accounts are set up correctly, one to deduct and one for tax type accounts.


Next, go to your VAT Rates settings.

Create two rates, one for purchases and one for sales taxation

Settings for your Purchase rate


Settings on your sales taxation rate


Be sure to add the Deduction components to each one and set it to the right accounts, for purchase rates set to your deduction account VAT input. For sales rates, make sure the deduction is set to the Sales VAT account for output.

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