Recording a sales tax expense on imported goods in Canada serves multiple purposes for your business. You keep accurate records for when you remit the GST/HST to the Canada Revenue Agency. You also track a duty expense, or a tax on imported goods, when it applies to certain items you bring in from another country. In both instances, you can record a sales tax expense on imported goods with QuickBooks Online.
Specific Steps for Recording a Sales Tax Expense on Imported Goods
Take a look at the specific menu options you need to complete this function in QuickBooks Online.
- Select Expenses from the left menu and then Expenses at the top.
- From the New Transaction drop-down menu, select Expense.
- Add one line item to the expense account connected to the imported item for at least $0.01.
- Choose the tax code that includes all tax types of taxes you pay for these items. For example, if you paid both Goods and Services Tax (GST) and the Provincial Sales Tax (PST) on imported goods, then select the GST+PST tax code.
- Add a second line item within the same account for “out of scope” tax code, or for any goods that don’t apply to the GST or PST, and -0.01.
- Next, edit the boxes at the bottom of the page to the amount you pay for each tax category.
- Finally, select the Save button in the bottom-right corner of the screen to save the transaction.
Maintaining accurate records for sales tax expenses in QuickBooks Online makes tax time easier. It could also lead to a tax credit if you can claim an input tax credit (ITC) on sales taxes you pay for items necessary for your business. QuickBooks Online can help you maximize your tax deductions. Keep more of what you earn today.