Making sure you're recording your transactions the right way is a good exercise for preventing errors in your books.
I recommend contacting an accounting professional to get more info on how to properly record the PST in your books. If you're not in contact with one, I encourage you to search for one on our website using this link here. Doing this will help prevent any future discrepancies. In case you need to add the tax code in your books, Let me know if you have other questions. I'm here to help.
Thanks for your reply. I apologize, in order to get my question under the character limit, what I was asking might have been unclear. My question will be relevant for PST-exempt service providers.
The key facts are:
- Based on our location, a BC Ministry of Finance tax agency was created in the QBO setup process.
- We only provide exempt services so we're not required to collect, remit, or report BC-PST.
- We pay PST on expenses (mostly in BC, but occasionally in other provinces related to travel and conference expenses).
My question is:
For each province in which expenses are incurred, is it necessary to "Start Tracking in a New Province" and add the tax agency for that province?
Doing that will:
1. Allow the amounts of expenses to be correctly allocated between the expense (including the PST paid) and recoverable GST input tax credits; and
2. Automatically update tax rates as they change; but
3. Create tax agencies in jurisdictions where they aren't needed and in QBO a schedule for filing returns / remittances for accounts that don't exist.
Or, is there another solution that will allow the correct allocation of payments between recoverable GST ITCs and expense accounts, but without creating a tax agency and a filing schedule?
Thanks for your help.