Hi David, thank you for your insights! So, to highlight the differences between my thoughts and yours:
* prepaid stamps as an asset, not a negative liability * tax passed as-is to the customers are not actually expensed (since the invoice would have as the "income account" to debit the Assets:TaxStampsPrepaid or Liabilities:TaxPayableDeferred accounts directly) * when not passing the tax stamp onto the customer, that would be my expense, without any direct link to the actual invoice. Is my understanding here correct? Especially, from a formality point of view, is it really correct to *not* expense the tax stamps I'm passing over to customers? -Mattia On Fri, Oct 22, 2021 at 12:26:18PM +1000, davidcousen...@gmail.com wrote: > Mattia, > > When you purchase tax stamps in advance, they become a temporary asset of your > business which you would expense at the time you attach then to an > invoice.when > you purchase the stamps you would credit your bank account by the amount of > the > purchase and debit an appropriate asset account (e.g. > Asset:Current:TaxStampsPrepaid). > > If you don't pass the tax onto the customer it won't appear as a line item in > the invoice and simply becomes an expense on your business. You would at the > same time as you raise the invoice and attach the tax stamp create a > transaction > which credits the above asset account and debits an Expense:TaxPaid account. > > If you are passing it on to the customerthen create a secondline in the > invoice, > Add an appropriate description,set the Income account to > Asset:Current:TaxStampsPrepaid and set the amount of the attached tax stamp. > This will add the value of the tax stamp to the A/R account and credit > Asset:Current:TaxStampsPrepaid > > On the other hand when you raise an electronic invoice and payment is deferred > to a future date, then the tax component is a liability on your business which > you would record inan account labelled something like > Liabilities:TaxPayableDeferred. > > Again if your business is paying the tax and it is not being passed onto the > customer then in parallel to raising the customer invoice you would create a > separate transaction which credits Liabilities:TaxPayableDeferred and debits > an > expense account Expense:TaxPaid and there would be no line item in the invoice > to the customer. > > If you are passing the tax onto the customer, then when you raise the invoice > you add a second line for the tax , set the Income Account to your > Liabilities:TaxPayableDeferred account and enter the amount of the tax payable > in that line. This will create a credit to the Liabilities:TaxPayableDeferred > account with a matching debit added to the sum of the other lines to the A/R > account. > > Wehn your tax liability is paid your check account is credited by the total of > the amount paid and the Liabilities:TaxPayableDeferred account is debited by > the > same amount. > > This is of course a generic treatment and may be altered by specific > regulations > and law which may apply in your jurisdiction. > > > David Cousens > > > On Fri, 2021-10-22 at 00:01 +0200, Mattia Rizzolo wrote: > > Hi people! > > > > With the disclaimer that I'm keeping these books for myself, as I'm not > > required by law to keep them at all, here I come ask you about this > > specific tax. > > > > Also, this turned quite longer than I thought it would, actually while > > writing my thoughts cleared quite a bit... :) Guess that's a kind of > > "rubber duck debugging"! > > For the quicker version go straight to below where I describe my case in > > way more practical terms. > > > > > > > > Background: > > When I issue an invoice I may (or may not) have to pay a 2€ duty stamp > > and attach it to the invoice. That's an effect specific to the fact > > that I produced a document, and I also need to attach such duty stamp > > to credit notes, for example. > > Now, if I do a paper invoice, I most likely already bought weeks/months > > prior a stash of those duty stamps. Instead, if I'm doing an electronic > > invoice, the payment for those stamp is deferred to the next quarter. > > Furthermore, I may or may not (my choice) bill the customer for the > > expense of this duty stamp. > > > > So I am a bit lost on how to properly account for this thing. To me is > > an expense, that may or may not be charged back to the customer, but I > > would also like to gather data on, like, how many invoices I'm issuing > > that I am not billing the duty stamp on, so I wouldn't like to "hide" > > them into some random expense/income account. > > The different methods of actual payment of them (in advance or > > postponed) surely doesn't help make it straightforward. > > > > Probably the hardest part is that I would really like to tie the expense > > to each invoice. I have no clue if there even is a way to do that, but > > it doesn't seem like there is one. Handling invoices through the > > GnuCash invoice system makes it impossible to me to add random splits, > > is there even a chance I could do this? > > If not, guess I would be stuck creating a separate transaction manually > > each time I issue an invoice. (in the below examples, I'm referring > > specifically to the two splits that invoice Expenses:Tax:DutyStamps) and > > simply "linking" that expense to the invoice by the memo field. > > > > > > > > > > > > To clarify and recap, here was my thinking: > > > > > > 1. The accounts (simplified naming, I have a deeper tree): > > Balance > > Assets:Banks:Checking 500.00 > > Assets:Cash 50.00 > > Assets:AR 0.- > > Expenses:Tax:DutyStamps 0.- > > Income:Invoices 0.- > > Liabilities:Tax:DutyStamps:Pre 2.00- > > Liabilities:Tax:DutyStamps:Post 0.- > > > > I decided to separate the Pre and Post variant of duty stamps since > > they are after all handled completely differently and stashing them > > in a single account would only create confusion later on IMHO. > > > > 2. When I buy "paper duty stamps" (that can only be bought in cash…): > > Debit Credit Balance > > Assets:Cash 2.00 48.00 > > Liabilities:Tax:DutyStamps:Pre 2.00 4.00- > > > > Here the Liabilities:Tax:DutyStamps:Pre represents a sort of prepaid > > expense, resulting in a credit for me, which is hence recorded as a > > negative liability. > > > > 3. When I issue an electronic invoice for which I am *not* charging the > > customer: > > Debit Credit Balance > > Expenses:Tax:DutyStamps 2.00 2.00 > > Liabilities:Tax:DutyStamps:Post 2.00 2.00 > > > > This is what I would love to have in my invoice posting transaction > > (the one that also bears A/R and Income), but that I fear my just > > simply not be possible. > > > > 4. When I issue an electronic invoice for which I am charging it back: > > Debit Credit Balance > > Expenses:Tax:DutyStamps 2.00 4.00 > > Liabilities:Tax:DutyStamps:Post 2.00 4.00 > > Assets:AR 2.00 2.00 > > ?????????? 2.00 > > > > To what should I match that AR? It ought to be some kind of Income, > > but I am not really sure, it's not really an income is it? It feels > > constrained to use Income:Invoices. I was half-thinking to match it > > against Expenses:Tax:DutyStamps (similarly to what one would do with > > credit card rebates), but GnuCash won't let me do that from within an > > invoice. Or am I looking at this from the wrong side and I should > > just get an Income:TaxCollection kind of account? > > > > 5. When I issue a paper invoice, not claiming back the duty stamp: > > Debit Credit Balance > > Expenses:Tax:DutyStamps 2.00 6.00 > > Liabilities:Tax:DutyStamps:Pre 2.00 2.00- > > > > And there follows the rest of the invoice; like with case 3, beside > > this magic linking that I would love to have with these 2 splits and > > the actual invoice, I think nothing more is needed. > > > > 6. For the paper invoice claiming back the duty stamp, it should be like > > case 4 with the :Pre account, nothing else. > > > > 7. When I go to settle the postponed duty stamp and the end of the > > quarter I suppose I'll simply do: > > Debit Credit Balance > > Liabilities:Tax:DutyStamps:Post 4.00 0.00 > > Assets:Banks:Checking 4.00 496.00 > > > > And be done. > > > > > > > > Am I in the right direction? Do you spot anything totally wrong? And > > how would you handle these details I'm unsure about? > > > > Thank you in advance for any thought and input you might be able to give > > to me! :) > > > > _______________________________________________ > > gnucash-user mailing list > > gnucash-user@gnucash.org > > To update your subscription preferences or to unsubscribe: > > https://lists.gnucash.org/mailman/listinfo/gnucash-user > > If you are using Nabble or Gmane, please see > > https://wiki.gnucash.org/wiki/Mailing_Lists for more information. > > ----- > > Please remember to CC this list on all your replies. > > You can do this by using Reply-To-List or Reply-All. > > _______________________________________________ > gnucash-user mailing list > gnucash-user@gnucash.org > To update your subscription preferences or to unsubscribe: > https://lists.gnucash.org/mailman/listinfo/gnucash-user > If you are using Nabble or Gmane, please see > https://wiki.gnucash.org/wiki/Mailing_Lists for more information. > ----- > Please remember to CC this list on all your replies. > You can do this by using Reply-To-List or Reply-All. -- regards, Mattia Rizzolo GPG Key: 66AE 2B4A FCCF 3F52 DA18 4D18 4B04 3FCD B944 4540 .''`. More about me: https://mapreri.org : :' : Launchpad user: https://launchpad.net/~mapreri `. `'` Debian QA page: https://qa.debian.org/developer.php?login=mattia `-
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