Hi there AndreaG1,
Accurately tracking and remitting taxes is an important part of running a business and QuickBooks Online makes this process easy with its Sales Tax module. I'm glad you've reached out here in the Community for the correct way to account for this unique situation. I'll point you in the right direction.
In order to use the Sales Tax module in QuickBooks Online, you'll need to set up a tax agency to represent the foreign government that you will be remitting to. Keep in mind that QuickBooks Online does not remit to the tax agency for you, it simply tracks the taxes you collect and pay so that you know the correct amount to remit. Here's how:
- Navigate to the Taxes tab from the left menu.
- Select Manage sales tax from the upper right.
- Click Add tax, then select Add next to Add a custom tax and agency.
- Enter the name of the tax code, agency, and filing details.
- Hit Add.
For more information, here's an article on How to set up a new sales tax code.
When it comes to entering a separate transaction to represent the sales tax on your supplier bill, you may be able to enter a journal entry but this is a question best suited to an accounting professional. An accountant will have the know-how to point you in exactly the right direction, and can explain how this money movement will reflect in your accounts. If you're already working with an accountant, invite them to work on your books with you by navigating to the My Accountant tab and entering their email address. If you don't yet have an accountant, the Find a pro to help button on the same page will take you to a database of QuickBooks certified accountants in your area that are more than happy to support you. Many even offer free consultations.
Have a great evening!
