How to add your Value Added Tax in Modeliks?
In this article, we will guide you through the steps to add VAT in Modeliks, making your tax management more efficient and effective.
Managing Value Added Tax (VAT) can be complex, but with Modeliks, you can streamline the process and ensure accurate tax calculations ⚡
Step 1
Click on the "Add Tax" button to start and select the Value Added Tax feature. Give your Tax a recognizable name that helps you easily identify it within Modeliks. In our example, we will name it as "VAT" ✅
Step 2
Next, enter the applicable VAT Tax Rate for your business. For this example, let's set it to 20% Tax Rate ✅
Step 3
At this stage, let us explore the concepts below in order to better understand how to proceed further.
🧠 VAT is a bit more complex than Sales Tax
Input VAT is calculated on the products and services the company BUYS 💱
Output VAT is calculated on the products and services the company SELLS 💰
✍️ Total VAT = Output VAT - Input VAT
In addition, different products have different tax rates. So, if you have created revenue and cost streams for different products, you can enter the VAT tax rate on a revenue and cost level.
📢 Example
Basic food products could have a lower tax rate than luxury products ✔️
Step 4
If you anticipate that your VAT tax rate may change over time, select "Yes" and enter different tax rates for different periods. However, if your tax rates remain consistent, you can keep it as a single input. In our case, we select "No" ✅
Step 5
Choose the Frequency at which you fulfill your VAT tax obligations to the government. This can be monthly, quarterly, semi-annually, or annually, based on the regulations in your country. Select the appropriate payment frequency that aligns with your tax obligations.
Let's select "Quarterly" ✅ Click "Next" to finalize the setup of your Value Added Tax calculation in Modeliks.
📝 Edit your numbers
Keep in mind that blue-colored numbers are editable right at spot, black numbers are calculations and the arrow option allows you to paste the value to the end.
Alternatively, you can click on the edit icon that appears when you hover over the VATs' name to make changes.
👀 Accrued Tax and the Paid Tax would always be different numbers ✔️
The accrued tax is calculated every month as a tax obligation. When you actually pay this tax obligation, depends on the payment frequency.
❣️ Check out our video tutorial on how to successfully add your VAT! Remember, if you need guidance on adding Income Tax or Sales Tax in Modeliks, separate video tutorials are available in the taxes section.
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