--- title: VAT / GST - Value Added Tax Calculation description: Learn how to calculate VAT/GST with your products and services --- [Skip to content](https://help.planguru.com/knowledge/planguru-app-online/vat-gst#main-content) [![PlanGuru Help Center](https://help.planguru.com/hs-fs/hubfs/logo_PlanGuru_helpcenter.png?width=360&height=50&name=logo_PlanGuru_helpcenter.png)](https://help.planguru.com/knowledge?hsLang=en) - [Your Tickets](https://help.planguru.com/tickets-view) - [Sign out](https://help.planguru.com/_hcms/mem/logout) Open main navigation Close main navigation - [Your Tickets](https://help.planguru.com/tickets-view) - [Sign out](https://help.planguru.com/_hcms/mem/logout) - [Submit a Ticket](https://help.planguru.com/tickets-view/new) [Submit a Ticket](https://help.planguru.com/tickets-view/new?hsLang=en) Hello. What do you need help with? - There are no suggestions because the search field is empty. 1. [Help Center](https://help.planguru.com/knowledge?hsLang=en) 2. [PlanGuru App (Online)](https://help.planguru.com/knowledge/planguru-app-online?hsLang=en) 3. [Setup & Import](https://help.planguru.com/knowledge/planguru-app-online?hsLang=en#setup-import) # 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](https://help.planguru.com/hs-fs/hubfs/VAT%20Reference.png?width=625&height=301&name=VAT%20Reference.png) --- ### 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](https://help.planguru.com/hs-fs/hubfs/VAT%20Method.png?width=670&height=332&name=VAT%20Method.png) --- ### 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](https://help.planguru.com/hs-fs/hubfs/Add%20VAT.png?width=670&height=261&name=Add%20VAT.png) --- ### 3️⃣ Importing Accounts Before Applying VAT Before assigning VAT rates, you must load your **Chart of Accounts and historical data** via: - [QuickBooks Online](https://help.planguru.com/knowledge/planguru-app-online/qbo-import?hsLang=en) - [Xero](https://help.planguru.com/knowledge/planguru-app-online/xero-import?hsLang=en) - [Excel](https://help.planguru.com/knowledge/planguru-app-online/excel-import?hsLang=en) 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](https://help.planguru.com/hs-fs/hubfs/VAT%20Method%20Selector.png?width=670&height=428&name=VAT%20Method%20Selector.png) --- ### 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](https://help.planguru.com/hs-fs/hubfs/VAT%20sheet.png?width=670&height=347&name=VAT%20sheet.png) --- ### 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](https://help.planguru.com/hs-fs/hubfs/VAT%20projection.png?width=670&height=249&name=VAT%20projection.png) --- ### 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**. 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