You need to use this option whenever you wish to create a new Tax account or Tax code for Tax (VAT/GST/Sales tax) (Output Tax as well as Input Tax). 

You may also change the descriptions of an existing account, change the percentages on your various tax types and percentages whenever the legislation is amended, or to delete an existing account. 

The Tax codes and percentages, which apply for Tax (VAT/GST/Sales tax), are prescribed by Tax (VAT/GST/Sales tax) legislation and may be amended from time to time by the Tax Authorities.

Being registered for Tax (VAT/GST/Sales tax), you will have two basic accounts, i.e. Output Tax that is charged when selling services or goods, and Input Tax when you purchase from another registered Tax (VAT/GST/Sales tax) vendor. 

TurboCASH will have setup an Output Tax VAT/GST/Sales tax) and an Input Tax (VAT/GST/Sales tax) account as sub-accounts of the Tax (VAT/GST/Sales tax) Control account as Current liabilities for you in the templates. 

The Tax codes and percentages differ from country to country and you may be required to change the percentages and create new codes whenever the legislation changes.

English (Default language file) refers to Tax. If you select the following English languages, it will refer to the following tax terminology:

English VAT

English GST

English Sales tax / Consumption tax



en-American (Sales tax)



en-Tonga (Consumption tax)



















It is of utmost importance that you create these codes and percentages correctly to suit your needs and the requirements of legislation applicable to your country. You have to create, or add the Tax accounts (Tax codes), which you will need to fill in your Tax (VAT/GST/Sales tax) return. TurboCASH will print the necessary Tax (VAT/GST/Sales tax) reports for your Tax codes.

These Tax codes, or Tax accounts, should be created as sub-accounts. Before you can create the Tax codes you need the following two General ledger accounts created in Accounts (Action ribbon): 

1.VAT/GST/Sales tax Control account - the main account which will be used as a totalling account for the Tax codes.

2.VAT/GST/Sales tax Payments account - the sub-account which you need to allocate your Tax payable (as submitted on your Tax (VAT/GST/Sales tax) returns) when you make payments in the payments journal to the Tax Authorities.

In cases where the Input Tax is more than the Output Tax, you need to allocate the refunds received from the Tax Authorities in the receipts journal.

The Tax codes need to be created within the account codes or numbers of these two General ledger accounts. For each of the Tax (VAT/GST/Sales tax) items on the Tax (VAT/GST/Sales tax) return, you need to have a Tax code, which will contain the description and percentage as prescribed by legislation for your country. In South Africa, some of the Tax (VAT/GST/Sales tax) codes, as shown on the VAT Return Form (for South Africa) are as follows:

Block on VAT Return

Tax code

Short description


Output Tax - Standard Goods - 15%

Selling of Goods and Services


Output Tax - Standard Goods (Capital) - 15%

Selling of redundant equipment (old computers / vehicles, etc.)


Output Tax - Zero Rated - 0%

This is Taxable Supplies, but is rated at a zero rate or percentage (0%).


Input Tax - Standard Goods - 15%

Purchases of goods and services, for which you have a valid Tax Invoice from a registered VAT vendor. 

If you do not have a Tax Invoice or certain items are excluded from VAT (e.g. Tea refreshments, staff parties, expenses relating to exempt supplies, etc.) you need to select No Tax for the specific transaction.


Input Tax - Capital Goods - 15%

Purchases of Capital goods or services, which will be used in the business.


Adjustments - Bad Debts

If VAT was charged to Debtor (customer / client) accounts, and VAT (Output Tax) was submitted and paid over on a previous VAT return, and the amount is irrecoverable, the bad debts selling price - exclusive of VAT must be written off as bad debts and the tax amount to this Tax code. 

You need to keep proof that you have made attempts to collect this debt.

 To create a new Tax account (Tax code):

1.On the Action ribbon, select Accounts. The "Accounts" screen; listing your available accounts will be displayed. 

2.Select the Tax Control account (as in this case, “G860-000 VAT Control account - 15%”).


2.Click on the (Add:Account) icon (or select the Add on the context menu). An entry for the new Ledger account is displayed (e.g. “G860 000 Account name” on the Account list. The Tax code is a Sub-account for the Tax main account (i.e. “VAT Control account”).

3.Enter or select the following:        

a)Account type - Select “Tax account”.

b)Account no. - The Main account “860” is displayed and cannot be edited. Type “010” in the sub-account field.

c)Description - Replace Account name with the new Tax code description e.g. “Output VAT – 15%”.

d)Account group 1 - “Current liabilities” should be displayed. This is the Account group which is linked to the Main account. 

e)Account group 2 - Select Account group 2, if not selected.

f)Type - “Balance sheet” should be displayed. This field cannot be selected, since the main account is a Balance sheet account type.

g)Sub-accounts - This field cannot be selected, since this is a sub-account. 

h)Status - “Enabled” (default) should be selected.

i)Open item account - “No” (default) should be selected.

j)Use link tax - “Empty” (default) should be selected.

4.Click on the Tax tab. 


5.Enter the your tax rate in the "Percentage" field, e.g. “15” for the purposes of this documentation.

6.Use Link Tax - To be advised.

7.Show tax in documents - To be advised.

8.Click on the Save button. The account will automatically be placed in the correct structure of the Account list.

The icon will change from (Assets / Liabilities) to (Tax account).