VAT and GST

Value-added tax, where the tax you pay on purchases offsets the tax you charge.

Taxes → VAT/GST.

VAT is structurally different from US sales tax, and cannot be represented by a rate table alone.

Under sales tax you charge tax on sales and remit it. Tax you pay on purchases is simply a cost.

Under VAT you charge output tax on sales and reclaim input tax on purchases. You remit only the difference. That reclaim is the entire mechanic.

Setting up a scheme: Taxes → Schemes → New. Choose VAT or GST/HST, your country and registration number, and the filing frequency. Input and output tax accounts are created for you.

Choosing VAT or GST always enables input-tax reclaim — that is what makes it VAT, not a preference to be switched off.

The return follows the UK VAT box layout, the most widely recognised:

• Box 1: output tax charged
• Box 4: input tax suffered
• Box 5: net due (or reclaimable)
• Boxes 6 and 7: sales and purchases excluding tax

A period showing more input than output tax is a refund claim, and the return says so.

A period cannot be filed twice — file a correction instead.