Setting Tax Rates: Corporate Tax and Sales Tax

Do I need to include Taxes in My Revenue Streams?

You don't need to manually add sales tax amounts to your revenue stream entries. Enter your revenue without adding tax. Upmetrics calculates the applicable sales tax automatically based on the default rate or the rate assigned to that revenue stream.

Setting Income Tax or Corporate Tax

Income or corporate tax is calculated based on your business profits. You can enter one estimated tax rate for the entire forecast or set a different rate for each forecast year.

1

In the Finance Forecasting module, open the Forecast tab and select Taxes.

2

In the Income Tax or Corporate Tax section, enter your estimated tax rate in the What is your estimated tax rate? field.

If the same estimated tax rate applies throughout your forecast, you can leave the yearly rate option turned off.

3

To use different income tax rates in different years, enable Set a different rate for each year.

Enter the required percentage for each year under Tax rate by year.

TIP: Leave a yearly rate blank to use the default estimated tax rate entered above. Enter 0 for a year in which no income tax should be calculated, such as a year offset by a loss carryforward.

4

Under How often will you pay your taxes?, select how frequently the tax will be paid and choose when the payment should occur.

When you're finished, click Save.

NOTE: This rate is intended for income or corporate tax. Employee-related taxes should be entered in the Personnel forecast, while taxes such as property tax are generally entered as regular expenses where appropriate.

Setting Sales Tax

Use the Sales Tax section to configure the taxes you collect on sales and, where applicable, the taxes you pay on purchases.

Sales tax is now managed in separate areas for Tax rates, Tax filing, Tax on sales, and Tax on purchases. This gives you more control over how different tax rates are applied throughout your forecast.

If your business uses another name for sales tax, such as VAT or GST, click Change Tax Name at the top of the section.

Manage your Sales Tax rates

1

In the Sales Tax section, click Manage next to Tax rates.

2

Enter or update the Name and Rate for each tax rate.

To create another tax rate, click Add a rate, enter its name and percentage, and then click Save rates.

TIP: Create separate rates when different products, services, or transactions are taxed differently. You can assign these rates individually later.

Configure your Sales Tax filing schedule

3

Click Change next to Tax filing.

4

Under How often will you pay your taxes?, choose your filing frequency.

Depending on your setup, you can select options such as Monthly, Two-monthly, Quarterly, or Annually.

5

Use the second dropdown to choose when the tax payment should be made for the selected filing period.

For example, with quarterly filing, you can choose options such as End of Quarter, Start of Next quarter, or Two months after quarter ends.

Click Save when you're finished.

NOTE: When an option refers to the end of the year, it means the end of your financial year, not necessarily December.

Set Tax on sales

6

Under Tax on sales, choose the Default rate on what you sell.

This rate will be used automatically for new revenue streams. Revenue streams that already have their own tax rate will keep their existing rate.

7

If different revenue streams require different tax rates, click Set rates per revenue stream.

8

In the Rates per revenue stream panel, select the applicable sales tax rate for each revenue stream.

You can also use Set all to to apply the same rate to all listed revenue streams at once.

Click Save changes to apply your changes.

Set Tax on purchases

The Tax on purchases section controls how tax paid on costs, expenses, and asset purchases is treated in your forecast.

9

Under Can you claim this tax back on things you buy?, choose the option that matches how purchase tax applies to your business:

I reclaim it on my return — use this when eligible purchase tax can be deducted from the tax you owe.
I cannot reclaim it — it stays in my costs — use this when the tax you pay forms part of the cost or expense.

NOTE: The Sales Tax section notes that U.S. sales tax is generally handled using I cannot reclaim it — it stays in my costs. In this setup, enter your costs as the amount you actually pay.

10

If you select I reclaim it on my return, choose the Default rate on what you buy.

This tax is applied to relevant costs, expenses, and asset purchases and is deducted from the sales tax amount you owe.

11

To apply different tax rates to individual purchases, click Set rates per cost, expense or asset.

12

In the Rates per cost, expense and asset panel, select the appropriate tax rate for each cost of sales item, expense, or asset purchase.

You can use Set all to to apply one tax rate to all listed items, or choose rates individually.

Click Save rates when you're finished.

TIP: To add your sales tax due from previous periods, refer to this step-by-step guide.

Where does this entry appear in the financial statements?

In the Profit and Loss statement, income or corporate tax appears as a tax expense when your business is profitable. Sales tax collected from customers is not treated as revenue or as a separate Profit & Loss expense because it is collected on behalf of the tax authority.

If purchase tax cannot be reclaimed, it remains part of the related cost or expense in your forecast.

On the Balance Sheet, outstanding income and sales tax amounts are reflected in your tax balances. If you pay taxes periodically, such as quarterly or annually, the balance builds up until the scheduled payment is made.

In the Cash Flow statement, tax payments affect your cash based on the filing and payment schedule you configured. This helps your cash flow forecast reflect the time between when tax is accrued or collected and when it is paid.

You can also refer to the Income and Sales Taxes report for a detailed breakdown of your tax calculations.