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Re: booking taxes when invoice is paid

On Fri, Feb 19, 2010 at 20:29, Chris Travers <..hidden..> wrote:
I am assuming this is a local tax law issue. ÂThere are screwy local
tax rules out there. ÂFor example, in some (Canadian) jurisdictions,
whether some items are taxable depends on what else you buy.... ÂIn
some European jurisdictions, invoices must be tracked per
government-issued form they are printed on....

I have stopped expecting tax law to be logical or sane.

The main thing is we need to know exactly what the requirements are
before providing some suggestions about how to make it work....

In The Netherlands you actaully may choose which method you wish to use. The standard is accrual, but for (very) small organisations which only/mostly do (petty) cash based trading or if you want to pay tax when you actually got payed (and receive a tax refund when you payed) for goods and services, cash based accounting is an option. Switching the method is only allowed after approval by the tax-authority and consist of a complex reconsiliation of tax related accounting entries at that moment.

From an accounting (software package) point of view, the only differences are the moments of transferring the tax-amount to the tax liability account and for (income statements) reports the income and expenses should be accounted on the dates of payment.

Best Wishes,
Chris Travers

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