QBO - Sales taxes outside US

Let me guide you on how to set up sales tax outside US jurisdictions in QuickBooks Online, @accountingboogie.

If you collect sales tax in multiple locations you'll need to understand how QuickBooks calculates it.

• If you sell in multiple locations, the correct sales tax for each location needs to be calculated.
• QuickBooks Online automatically calculates the correct sales tax for you for each location.
• For us to calculate the correct sales tax, we need to know where you are. You'll need to make sure that your sales tax settings are correct.

To do this, I suggest consulting an accountant on how you can set up the non-us sales tax. This is to ensure that the recordings are accurate to avoid any miscalculations. 

The second option is to use the API. For this, I recommend posting your concern on their forum as they are the best gurus that can help you with your concern. I'd be glad to guide you how:

1. Go to this link: https://help.developer.intuit.com/s/
2. Select QuickBooks Online.
3. Click Ask a Question.

You may also read these resources to learn more about sales tax in QuickBooks Online: 

• Sales tax in QuickBooks Online
• Set up your sales tax

Know that I'm just a post away if you have clarifications with managing sales tax in QuickBooks Online. I'm always willing to help. Have a good day.

Hi thank you for the quick answer.

My question is more, is there a way to not link sales tax to an agency and is it possible the currency is automatically in CAD or at least convert in Canadian dollar?

QBO doesn't let my set up sales tax without an agency (the only agencies are in the US), and legally I need to collect Quebec (Canada) sales tax when I send an invoice for my clients there. I don't mind filing manually my sales taxes, I just need it to appear at the right place in the invoice and that QB calculate the percentage I need.

Let me help track the Canadian sales tax, accountingboogie.

In order to take foreign taxes, you need turn on the Multi-currency feature in QuickBooks Online. Then, you can add the customer and choose their currency.

Here's how to turn on multi-currency:

1. Go to Settings ⚙️.
2. Go to Account and Settings, then go to Advanced.
3. Select Edit ✎ to modify your currency settings.
4. Choose the Multicurrency checkbox.
5. Select Save and close.

Next, you need to add the CAD currency:

1. Go back to Settings ⚙️, then Currencies.
2. Click Add currency.
3. Select the new currency from the Add Currency ▼ drop-down menu.
4. Click Add.
5. The currency you selected is added to your list of currencies.

Your last step is to add a foreign customer. If you've already added the customer, you won't be able to change the currency in their profile.  Here's how:

1. From the left menu, select Sales.
2. Click Customers, then New customer.
3. In the Customer information window, fill out the needed information.
4. Make sure to add their Canadian address for sales tax calculation.
5. Select Payment and billing.
6. In This customer pays me with field, select the customer's currency. This is the currency that the customer uses to pay you for products or services.
7. Click Save.

Check out the About Multicurrency for more details about this feature in QuickBooks.

Stay in touch if you have follow-up questions. I'll be right here to help you.

I did all that already, but it is the sales tax I don't understand on how to add them without an agency since the only options are agencies in US and not Canada.

I have a similar situation to the OP here.  When you say 'create a new account' and add a tax agency for that country,  what are the exact steps involved?  Will it enable tracking of how much tax has been collected and corresponding payments?  

Hi there, aussierocker.

Creating a new account for Canada means you are to subscribe to a QuickBooks Online Canada version. Here's how to do that:

You can go to the QuickBooks Online (QBO) website to start a new subscription. You'll see Plans & Pricing and get to choose the version that fits your business needs.

1. Go to QuickBooks Plans & Pricing.
2. Click Buy Now or Start Free 30-Day Trial.
3. Select a product (Simple Start, Essentials, Advanced or Plus).
4. Choose Buy Now or select Try it free to subscribe.
5. Select Already have an account? Sign in.
6. Sign in with your previous or current user ID and password.
7. Follow the onscreen prompts to set up a new subscription under your existing login.

You can also switch from one company file to another. Kindly refer to this article for the detailed steps: How do I switch companies?.

Once done, you can add a new tax agency from there. Follow the steps below for your reference:

1. From the left menu, select Taxes.
2. Under the Related Tasks list on the right, select Add/edit tax rates and agencies.
3. Select New and choose either a single or a combined tax rate.
4. Enter a name for the tax, the agency you pay, and the percentage for the rate. ...
5. Click Save.

Regarding your question about the ability to rack of how much tax has been collected and corresponding payments, the answer is yes.

Learn more about the things you need to do with your new company by visiting this article specifically made for QBO Canada: Learn QuickBooks basics and get set up for success.

Feel free to go back to this thread if you need anything else while working with sales taxes. Have a good one.

Are we able to add CUSTOM TAX? I was able to add CUSTOM TAX code if I put my location to Canada or outside of US, but when I did it for account in the US it still give me Base on location. Is there something that is preventing Custom tax code from been created in the US?

I can show you how to set a custom tax rate, @Billi3665.

You can go to the Sales tax settings to set up custom tax rates. Then, when you make a sale you can add them on your invoice or sales receipt

1. Go to Taxes menu and then Sales tax.
2. Click on Sales tax settings and in the Custom rates section, select Add rate.
3. Choose Single or Combined and then pick the Agency you file payments to.
4. Enter the Rate, then Save.

For more information on how to add a rate and use it when you make a sale, refer to this article: Use custom rates to manually calculate taxes on invoices or receipts.

To review what you owe from time to time, you can run the Sales Tax Liability report to view your sales tax information. 

I'm always here if you need more help with your sales tax by leaving a reply below. Take care and have a great rest of the day!

I am having a similar issue to the OP. In my case I sell a service and am not liable for sales tax as a Florida-based company. The service I sell, sailing charters, is rendered in the Bahamas however, and to have the privilege to offer sailing charters in the Bahamas, I must collect and remit a 4% charter tax on every charter to the Bahamian government. I can't sort out how to add this to my invoices. Help please!

Hi there, laraortiz.

Since you'll only be collecting tax for Bahamas, you can create a custom rate and apply it to the invoice. 

Let me guide you how:

1. From the Taxes tab, select Sales tax.
2. In the Custom rate section.
3. Click Add rate.
4. Select either Single or Combined.
5. Give it a Name.
6. Enter the Agency.
7. Add the rate.
8. Click Save.

Afterwards, you're good to use it on the invoice. Here's how:

1. On the Invoice page, click the drop-down arrow beside Based on location.
2. Select the custom rate for Bahamas.
3. Click Save and close.

Also, as you start using custom rates, it’s helpful to review what you owe from time to time. You can run the Sales Tax Liability report to view your sales tax info anytime.

There you have it, laraortiz. You can always count on me if you need help in running the report.

But the custom rate can't be attached to Canada, so do you recommend attaching it to a State the taxpayer isn't required to file in?  It is unclear to me how you are able to generate a sales tax liability report for this.

Hello there, jenmwentworthcpa.

I'll be sharing insights on how sales tax works in QuickBooks, as well as alternative steps for managing non-US customers smoothly. I'll also ensure you'll be routed to the right person to assist you further on this matter.

Please know that QuickBooks calculates the total sales tax rate for each sale based on the following:

• Your customer's sales tax exempt status.
• Where you sell and where you ship.
• Your service or product's sales tax category.

Since you've mentioned that state the taxpayer isn't required to file, you can consider setting up your Canadian customer as tax-exempt. This is to keep a person from ever getting charged sales tax on a transaction to avoid liability in filing taxes.

Here's how:

1. Go to the Sales menu and choose Customers.
2. Choose a specific customer.
3. From the Customer display name field, enter what you want to display for the customer. (this is a required field)
4. Then, review each section and enter any other important customer info. 
5. Go to the Additional info section and select the checkbox for This customer is tax exempt. Then, select why they’re tax-exempt in the Reason for exemption dropdown list.
6. Click Save.

Furthermore, I also recommend consulting an accountant for additional assistance, as they will be able to offer suggestions on how you correctly manage tax data for non-US customers. This allows you to verify how to generate a sales tax liability report for this particular situation.

In case you need guidelines to help you manage US sales for your US customers and use tax rules, you can read this article: Learn about sales and use tax in the US.

You can drop a comment below if you have any other questions related to sales tax in QBO. I'll be happy to help you some more, jenmwentworthcpa. Take care.