GST (5%) and PST (7.5%)

Posted by alexxxita on February 27, 2008, 7:48 pm

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Hi everyone, I just wanted to clarify something,

I can understand that we need to set up the taxes authorities first,
then create taxes codes.

But if we combine 2 taxes, we get:

> 100$ invoice + 12.5% (combined GST 5% & PST 7.5%) = 112.50$

But what we need is to add the 5% GST to the total and in a second
step, add the 7.5% PST to that amount :

> 100$ invoice + GST (5%) = 105.00$ + PST (7.5%) = 112.86$

Any solution?

Meanwhile I will keep searching...

Thank you

Alexandra

Posted by alexandra on February 27, 2008, 8:03 pm

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> I read this but still think the same problem applie:

I think that a reading of the Peachtree manual would help here. What
you need to do is to set up the "Tax Authorities" and the " Tax Codes"
just as the manual describes, with Tax codes for GST+PST, and finally,
Exempt, applying the tax authorities accordingly. Apply the tax codes
to the customer records, and change them as might be occasionally
required on the invoice. With the appropriate GL codes configured,
then you don't have any further problems. You would pay your sales
taxes according to your month/period end trial balance amounts.

The only deficiency is that your invoiced taxes aren't disclosed
separately, but lumped together as a total. If you have customers
that require sales taxes to be shown separately, then set the sales
taxes up in inventory as non-stocking items, with the price being the
tax rate, and the quantity on an invoice as the accumulated amount of
the invoice before the taxes are applied.

Most Canadian Peachtree users with whom I'm in touch use the native
Peachtree "Tax Authorities" and the " Tax Codes", and I've never heard
of any complaints from them about sales tax auditors complaining.

> how can this be if the total from adding two taxes at once is not the same as

charging the second taxes on the total amount of the invoice that included the
first taxe?

Posted by alexandra on February 28, 2008, 2:54 pm

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The software is : Peachtree First Accounting 2008. It is the basic
version.

Posted by alexandra on March 1, 2008, 4:38 am

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1. You must calculates GST (5%)
2. add it to the selling price,
3. then applies the QST (7.5%) to the GST and selling price.

Posted by Ted on March 6, 2008, 12:09 pm

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->1. You must calculates GST (5%)
->2. add it to the selling price,
->3. then applies the QST (7.5%) to the GST and selling price.

Effectively, your PST rate is then 0.07875 on the base price plus GST

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