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Level 1

Recording Customs and tax charges on Purchase Orders

Looking for some help with how to properly record the customs duties and taxes on a purchase order for a shipment that was received. My main concern is how do a properly account for the taxes that were paid so that I can receive the tax credit. Do I need to create a second bill with the charges or add it on to the original purchase order?



3 Comments 3
QuickBooks Team

Recording Customs and tax charges on Purchase Orders

Hello there, @Dvorak24.


You can either create a service item and add it as a line item in the purchase order. The other way is to create an expense account directly selecting in the Chart of Accounts. I can guide you on how to do it.


Here's how to create a service item:

  1. Click the Gear icon.
  2. Select Products and Services.
  3. Click on New.
  4. Choose Service.
  5. Enter the Incom account.
  6. Choose I purchase this product/service from a supplier.
  7. Enter Expense account.
  8. Hit Save and close. 

On the other hand, you can follow the steps below in creating an expense account. 

  1. Go to the Accounting menu.
  2. Select the Chart of Accounts tab.
  3. Click the New button.
  4. Enter the account information. 
  5. Click the Save and Close button.

Lastly, I'd recommend consulting your accountant so you'd be guided appropriately in assigning a specific expense category to your transactions. Also, you'd be assisted on the best way to track your customs duties and taxes.


Swing by here if you have other questions about managing your expense transactions. I'm always here to help.

Level 1

Recording Customs and tax charges on Purchase Orders

Thank you for your quick response. I just have a follow up question. On the customs duty receipt they split the payment into 2 categories, one is for Duty charges and the other is GST on the value of the shipment plus the duty charges. How to I properly record the GST portion of the payment so that I receive the full amount of the GST as a tax credit when filling my taxes? Do I simply apply GST to each of the items after I factor and add in the extra duties charges for each item?




QuickBooks Team

Recording Customs and tax charges on Purchase Orders

Hi Dvorak24. I'd be happy to steer you in the right direction so you can focus on doing the things you enjoy. To ensure accuracy in your books, I recommend contacting an accounting professional to get more info on recording the transactions. Doing this will help prevent any future discrepancies 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. I'll also leave this question here so other accounting professional members can chime in. Let me know if you have other questions. I'm here to help.

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