In Canada, we have 3 types of taxes which are paid on purchases or collected on sales:
- PST (provincial sales tax): only applicable for sales or purchases in home province
- GST (general sales tax): federal tax of 5%, applicable on sales or purchases in 8 of 13 provinces & territories
- HST (harmonized sales tax): includes a federal and provincial component, can be 13%, 14% or 15% depending on the province, administered by the federal taxation authority, applicable on sales or purchases in 5 of 13 provinces & territories
Taxes must go into 4 different G/L accounts:
- PST payable (for PST collected on sales)
- PST receivable (for PST paid on purchases)
- GST/HST payable (for GST/HST collected on sales)
- GST/HST receivable (for GST/HST paid on purchases
Can you please tell me how this can be set up so it becomes fully automatic, as every single incoming and outgoing invoice is subjected to one or two of these taxes.
Thank-you.