RE: How does NS track taxes on transactions?

I see that I can create Tax Codes, Nexuses, and also a setting for Withholding Tax, but I’m wondering how this translates onto the transactions and then reporting thereafter. I was told that there’s no need to create a separate Journal Entry since NetSuite “captures” the tax information already.

Any info on how this is done logic-wise & accounting-wise would be most appreciated. Thank you.

mgco Rookie Asked on September 11, 2019 in Taxation.
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2 Answers

When you create a transaction in NetSuite, a tax code defaults in the transaction depending on your tax setup in the Set Up Taxes screen, in the Item record, and in the Customer record. You can also manually override the tax code as applicable to the transaction.

The Tax Code record holds information as to the % of tax applied and the tax GL account to post against among other settings. These settings also dictate how transactions will appear in tax reports.

With this, upon saving the transaction created, the tax amount is automatically posted to the tax GL account. Hence, there is no need to create another journal entry to post the tax for each transaction.

Hope this helps!

Rookie Answered on September 21, 2019.
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