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VAT / GST - Value Added Tax Calculation

Learn how to calculate VAT/GST with your products and services

 

 

💰 Setting Up Value Added Tax (VAT) in PlanGuru

Value Added Tax (VAT) — also known as Goods and Services Tax (GST) — is a consumption tax assessed on the value added at each stage of production. Businesses charge VAT on sales (output tax) and deduct VAT paid on purchases (input tax).

  • VAT is common in Europe, Asia, Canada, and Australia.

  • In the United States, state and local sales taxes are more common, so VAT is rarely used.

  • The global average VAT rate is ~15% (12% in Asia, 20% in Europe).

VAT Reference

1️⃣ Enabling VAT in PlanGuru

During company setup:

  1. In the Create Company window, check the box to enable VAT/GST functionality.

  2. Select your calculation basis:

    • Cash → VAT applied when invoices are paid.

    • Accrual → VAT applied when invoices are issued, regardless of payment status.

    Example: If you invoice in June but receive payment in July, the VAT is still recorded in June under the accrual method.

VAT Method

2️⃣ Adding VAT/GST Rates

  1. Click Add VAT/GST Rates.

  2. Select a country.

  3. Enter the industry and rate.

  4. Add additional rates if you operate across multiple countries or industries.

  5. Click Save.

Add VAT

3️⃣ Importing Accounts Before Applying VAT

Before assigning VAT rates, you must load your Chart of Accounts and historical data via:

If you don’t have an accounting system, you can manually add accounts by right-clicking in the Income Statement or Balance Sheet.

4️⃣ Assigning VAT Rates to Accounts

To define which accounts are subject to VAT:

  1. Double-click on an account (or right-click → Edit).

  2. In the account settings window, choose the VAT rate from the dropdown.

  3. Assign rates to:

    • Revenue accounts (Income Statement)

    • Expense accounts (Income Statement)

    • Fixed Asset accounts (Balance Sheet)

You can do this while selecting Projection Methods for accounts.

VAT Method Selector

5️⃣ Viewing VAT Calculations

Once rates are applied, go to the VAT/GST Sheet in the financial statement dropdown.

This sheet displays:

  • Revenue section → broken down by VAT rates.

  • Expense section → broken down by VAT rates.

  • Acquisitions/Disposals of fixed assets.

  • VAT liability per month → calculated as net VAT on revenues vs. expenses.

VAT sheet

6️⃣ Linking VAT to the Balance Sheet

VAT amounts are only computed until you link them to the Balance Sheet.

  1. Go to the Balance Sheet.

  2. Add a new account called VAT Payable under Current Liabilities.

    • Or edit your existing VAT liability account.

  3. Change the account type to Other Current Liabilities.

  4. Select the VAT Liability projection method.

    • This links the VAT calculation sheet to your Balance Sheet.

VAT projection

7️⃣ Setting VAT Payment Frequency

When linking VAT to the Balance Sheet, choose a payment schedule:

  • Monthly

  • Quarterly

  • Select Months

Example: Selecting quarterly with a March start → payments occur in March, June, September, December.

The VAT Payable account will:

  • Accrue balances from the VAT/GST sheet.

  • Reduce when payments are applied.