Tax management

The Tax Management module reads the taxes your books hold and turns them into returns. It compares tax collected on sales with tax paid on purchases for any period, prepares GST/HST and VAT returns from the general ledger, files them (closing the period's tax accounts into what you owe), and records their payment or refund.

Before you begin

• Tax Management needs the Accounting and Taxes modules. Tax rates are defined in Taxes; their amounts reach the ledger through invoices, vendor bills and expense claims.
• Returns are prepared in your organization's currency.
• Open the module from Tax returns in the main menu (/m/tax-returns), or search the command palette for Open tax returns.

The page has three tabs: Collected vs. paid, Returns and Tax accounts.

info

Modulix summarizes your figures in the layout of the Canadian GST/HST return and of a VAT return. It does not send returns to a tax authority: file them on the authority's own portal, then mark them as filed here.

Key concepts

Term	Meaning
Tax collected	Tax charged on sales, held on liability tax accounts (the Tax collected role and accounts that tax rates post to).
Tax paid (recoverable)	Tax you paid on purchases and can claim back, held on asset tax accounts (the Tax recoverable role).
Net tax	Tax collected less tax paid. Positive: you owe it. Negative: a refund is due.
Tax settlement	The Taxes payable to authorities account. Filing a return moves the period's net tax onto it; paying the return clears it.

Set up tax accounts

The Tax accounts tab lists the ledger's tax accounts with their side (Collected or Recoverable), the tax rates posting to each, and their Balance. Below the table you see the account Owed to authorities, and any Rates posting to the tax collected account because they have no account of their own.

To make sure everything is in place:

1. Open the Tax accounts tab.
2. Optionally tick An account for each rate. Each active rate without an account gets its own liability account next to the tax collected account (for example, "GST (5 %)" and "HST (13 %)"), and the rate is set to post to it. This lets you see each tax separately.
3. Select Set up tax accounts.

Modulix makes sure accounts exist for Tax collected (2200 Sales tax payable), Tax recoverable (1400 Tax recoverable) and Tax settlement (2250 Taxes payable to authorities), adding any that are missing. The message Tax accounts ready confirms it.

The ledger's tax accounts and the rates posting to them.

Compare tax collected and paid

The Collected vs. paid tab shows, for each period between From and To (by default, this calendar year), grouped By Month, Quarter (the default) or Year:

Column	Meaning
Period	The month, quarter or year.
Collected	Tax collected on sales.
Paid (recoverable)	Recoverable tax paid on purchases.
Net	Collected less paid.

A Total row adds up the periods, and By account shows the amounts on each tax account. Entries made by filing and paying returns are left out, so the figures show the tax of your sales and purchases only.

Tax collected against tax paid, by quarter.

Prepare a return

1. On the Returns tab, select New return.
2. Choose the Return: GST/HST return or VAT return. It cannot be changed later.
3. Enter the period From and To, and optionally the Due date, the Confirmation number and Notes.
4. Save. The return opens as a draft.

A draft return always shows live figures from the ledger, so it stays up to date as you post more entries for the period.

A GST/HST return filled from the ledger.

GST/HST return lines

Line	Label	Filled with
101	Sales and other revenue	All income posted in the period
103	GST/HST collected or collectible	Tax collected
104	Adjustments	Zero
105	Total GST/HST and adjustments	Line 103
106	Input tax credits (ITCs)	Recoverable tax paid
107	Adjustments	Zero
108	Total ITCs and adjustments	Line 106
109	Net tax	Line 105 less line 108

VAT return boxes

Box	Label	Filled with
1	VAT due on sales and other outputs	Tax collected
2	VAT due on acquisitions from other countries	Zero
3	Total VAT due	Box 1
4	VAT reclaimed on purchases and other inputs	Recoverable tax paid
5	Net VAT to pay or reclaim	Box 3 less box 4
6	Total value of sales and other outputs, excluding VAT	All income posted in the period
7	Total value of purchases and other inputs, excluding VAT	Purchases before tax: entries with recoverable tax, vendor bills and expense claims
8	Supplies of goods to other countries, excluding VAT	Zero
9	Acquisitions of goods from other countries, excluding VAT	Zero

Adjustment lines and cross-border boxes are shown as zero. If you need amounts there, adjust them on the authority's form.

File a return

1. Review the draft return and its Tax accounts card.
2. Select File and confirm.

Filing:

• keeps the return's figures as they are on that day;
• posts an entry dated on the last day of the period that closes each tax account's period amount (collected accounts debited, recoverable accounts credited) into Taxes payable to authorities: credited with the net tax owed, or debited with a refund due;
• sets the status to Filed.

The periods of filed returns cannot overlap: a second return for the same days is refused. After filing, you can still change the Due date, Confirmation number and Notes, but not the period.

If entries are later posted in a filed period, the return shows how much was posted since it was filed. Correct it in a later return.

To undo filing, select Back to draft on a filed (not yet paid) return. Its closing entry is reversed.

Pay a return

1. Open a filed return and select Record payment. The dialog shows the amount Owed or the Refund due.
2. Enter the Date and, optionally, where it was Paid from (default: the bank): an asset account that takes entries.
3. Confirm.

Modulix posts the payment (debit Taxes payable to authorities, credit the bank) or the refund (the opposite), and the status becomes Paid. To undo it, select Cancel payment; its entry is reversed.

tip

With Banking, match the payment (or refund) on your bank statement and select Settle next to the return. The statement line's amount must equal the return's net tax.

Return statuses

Status	Meaning	Actions
Draft	Live figures from the ledger.	Edit, File, delete
Filed	Figures kept; tax accounts closed into what is owed.	Record payment, Back to draft
Paid	Payment or refund recorded.	Cancel payment

Only drafts can be deleted.

Permissions

Permission	What it allows	Granted by default to
tax-returns.read	View the collected vs. paid report, returns and tax accounts	Administrators
tax-returns.manage	Prepare, file and pay tax returns; set up tax accounts	Administrators

Tips

• Make the return's period match your filing frequency (monthly, quarterly or yearly). Periods of filed returns must not overlap.
• Close the fiscal periods of a return once it is filed, so nothing more is posted in them by mistake.
• Use An account for each rate if you collect several taxes (for example, GST and PST) and want to see each one's balance.