Tax Transactions — Complete User Guide — Two Accounts Web
Comprehensive guide for generating, analysing, and understanding the Tax Transactions report — a transaction-level breakdown of tax activity grouped by Tax Code, showing every sale and purchase with their tax amounts
Table of Contents
- What Is the Tax Transactions Report?
- Enabling from the Customize Menu
- Field-by-Field Guide
- Settings Configuration
- Creating a Tax Transactions Report
- How the Tax Transactions Is Calculated
- Drill-Down Capabilities
- Sample Data and Report Output
- Common Issues and Solutions
- Accounting Regulation Compliance
1. What Is the Tax Transactions Report?
The Tax Transactions report shows every individual transaction grouped by Tax Code, with each transaction's sale amount, sale tax amount, purchase amount, and purchase tax amount displayed side by side. This is the most granular tax report — it lets you audit every single invoice, receipt, payment, and journal entry that involved a Tax Code.
Unlike the Tax Summary (which aggregates per Tax Code into totals) or the Tax Audit (which cross-tabulates accounts × Tax Codes), the Tax Transactions report shows the actual individual transactions that make up those totals, grouped by Tax Code and ordered by date.
1.1 Structure
The report shows every transaction that has a Tax Code assigned, organised as follows:
- Grouped by Tax Code — each Tax Code used in the period becomes a group heading
- Within each Tax Code — transactions are listed individually, sorted by date
- Each transaction row shows four amounts: Sale Amount, Sale Tax, Purchase Amount, Purchase Tax
- Group totals — each Tax Code group shows the total of its four columns
- Grand total row — the bottom row sums all Tax Code groups
2. Enabling from the Customize Menu
The Tax Transactions report appears under:
- Reports → Tax Codes → Tax Transactions
The report is only visible when at least one Tax Code has been created in Settings. Once a Tax Code exists, the report appears automatically. No toggle in Customize Menu is needed.
3. Field-by-Field Guide
3.1 Report Header Fields
Location: Reports → Tax Codes → Tax Transactions → New Report
| Field | Required? | Description |
|---|---|---|
| Description | No | An optional label for the saved report (e.g. "Q1 2026 Tax Transactions"). |
| From Date | Yes | The start date of the period. |
| To Date | Yes | The end date of the period. |
| Accounting Method | Yes | Accrual Basis — invoices recorded when issued. Cash Basis — invoices converted to cash basis. |
4. Settings Configuration
4.1 Tax Codes
Location: Settings → Tax Codes
Tax Codes define the sales tax / VAT rates used by the business. The Tax Transactions report shows every transaction that carries a Tax Code. The Tax Code itself determines which group the transaction appears under.
5. Creating a Tax Transactions Report
- Ensure at least one Tax Code exists in Settings → Tax Codes
- Go to Reports → Tax Codes → Tax Transactions
- Click New Report
- Enter a Description (optional)
- Enter the From Date and To Date
- Choose the Accounting Method — Accrual or Cash Basis
- Click Save
- The report generates showing each Tax Code group with individual transaction rows
6. How the Tax Transactions Is Calculated
6.1 Transaction Loading
The system loads all General Ledger transactions within the period and calculates Cost of Goods Sold. If Cash Basis is selected, invoices are converted to cash basis by matching them to their corresponding receipts and payments. Only transactions that have a Tax Code assigned are included.
6.2 Per-Tax-Code Grouping
Transactions are grouped by their assigned Tax Code. Within each Tax Code group, transactions are ordered by date (with the transaction's reference and counterparty name used for display). Each transaction appears exactly once in the group, showing both its net amount and its tax amount in the appropriate sale or purchase columns.
6.3 The Four Columns
Each transaction row displays four columns based on how the transaction is classified:
| Column | Bold? | Filter | Formula | Example |
|---|---|---|---|---|
| Sale Amount | No | NOT a tax transaction AND is a sale | Sum of base amount × −1 | Sales Invoice net 100,000 → 100,000 |
| Sale Tax | Yes | IS a tax transaction AND is a sale | Sum of base amount × −1 | Output VAT 15,000 → 15,000 |
| Purchase Amount | No | NOT a tax transaction AND is a purchase | Sum of base amount (no sign flip) | Purchase Invoice net 50,000 → 50,000 |
| Purchase Tax | Yes | IS a tax transaction AND is a purchase | Sum of base amount (no sign flip) | Input VAT 7,500 → 7,500 |
6.4 Row Name Construction
Each transaction row is named using a composite of up to five fields:
Row Name = [Date] — [Transaction Name] — [Customer] — [Supplier] — [Bank Account]
Only non-empty, distinct values are joined.
Examples:
"5-Jan-2026 — Sales Invoice — 1 — Customer A"
"10-Jan-2026 — Purchase Invoice — 1 — Supplier X"
"15-Jan-2026 — Receipt — 1 — Customer B"
"20-Jan-2026 — Payment — 1 — Supplier Y"
"1-Jan-2026 — Opening Balance Entry"
6.5 Cash vs Accrual
Under Accrual Basis, invoices appear when issued. Under Cash Basis, the system converts accrual invoices by matching them against their corresponding receipts/payments. Converted entries appear as "Cash Basis Adjustment" in the report. This ensures the tax amounts reflect the actual cash flow timing.
7. Drill-Down Capabilities
Each amount in the Sale Amount, Sale Tax, Purchase Amount, and Purchase Tax columns is clickable. Clicking opens a detailed transaction viewer showing the individual General Ledger entries behind that amount, filtered by the transaction's Tax Code, sale/purchase classification, and date range.
| Drill-Down Target | Filter Applied | What You See |
|---|---|---|
| Sale Amount | That Tax Code + date range + NOT a tax transaction + only sale entries | The individual GL entries that make up the net sale amount — the revenue side of the invoice or receipt |
| Sale Tax | That Tax Code + date range + IS a tax transaction + only sale entries | The output VAT entries — showing the tax portion credited to the tax account |
| Purchase Amount | That Tax Code + date range + NOT a tax transaction + only purchase entries | The individual GL entries that make up the net purchase amount — the expense or asset side |
| Purchase Tax | That Tax Code + date range + IS a tax transaction + only purchase entries | The input VAT entries — showing the tax portion debited from the tax account |
Each drill-down view displays:
- Date — the transaction date
- Transaction — the document type and reference
- Customer/Supplier — counterparty information
- Description — transaction narrative
- Amount — the base currency amount
- Tax Code — the tax code applied
8. Sample Data and Report Output
8.1 Sample Setup
A trading company uses two Tax Codes — VAT-15 (15% standard) and VAT-5 (5% reduced). The following transactions occurred during January 2026:
Tax Codes Defined
| Code | Label | Rate |
|---|---|---|
| VAT-15 | Standard Rate VAT | 15% |
| VAT-5 | Reduced Rate VAT | 5% |
Transactions
| Date | Type | Reference | Counterparty | Net Amount | Tax Amount | TaxCode | Classification |
|---|---|---|---|---|---|---|---|
| 5-Jan | Sales Invoice | #1001 | Customer A | 300,000 | 45,000 | VAT-15 | Sale |
| 10-Jan | Purchase Invoice | #2001 | Supplier X | 50,000 | 7,500 | VAT-15 | Purchase |
| 15-Jan | Sales Invoice | #1002 | Customer B | 100,000 | 5,000 | VAT-5 | Sale |
| 20-Jan | Purchase Invoice | #2002 | Supplier Y | 80,000 | 4,000 | VAT-5 | Purchase |
| 25-Jan | Credit Note | #3001 | Customer A | (10,000) | (1,500) | VAT-15 | Sale (adjustment) |
8.2 Tax Transactions Output
Tax Transactions — ABC Trading
For the period: 1-Jan-2026 to 31-Jan-2026
Accrual basis
Sale Amount Sale Tax Purchase Amount Purchase Tax
━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━
VAT-15
5-Jan-2026 — Sales Invoice — 1
— Customer A 300,000 45,000 — —
10-Jan-2026 — Purchase Invoice — 1
— Supplier X — — 50,000 7,500
25-Jan-2026 — Credit Note — 1
— Customer A (10,000) (1,500) — —
VAT-15 Totals 290,000 43,500 50,000 7,500
─────── ─────── ─────── ───────
VAT-5
15-Jan-2026 — Sales Invoice — 2
— Customer B 100,000 5,000 — —
20-Jan-2026 — Purchase Invoice — 2
— Supplier Y — — 80,000 4,000
VAT-5 Totals 100,000 5,000 80,000 4,000
─────── ─────── ─────── ───────
Grand Total 390,000 48,500 130,000 11,500
8.3 Verification of Calculation
VAT-15 @ 15%:
Sale Amount: 300,000 (SI) − 10,000 (CN) = 290,000 ✓
Sale Tax: 45,000 (SI) − 1,500 (CN) = 43,500 ✓ (290,000 × 15% = 43,500)
Purchase Amt: 50,000 ✓
Purchase Tax: 7,500 ✓ (50,000 × 15% = 7,500)
Net VAT: 43,500 − 7,500 = 36,000 ✓
VAT-5 @ 5%:
Sale Amount: 100,000 ✓
Sale Tax: 5,000 ✓ (100,000 × 5% = 5,000)
Purchase Amt: 80,000 ✓
Purchase Tax: 4,000 ✓ (80,000 × 5% = 4,000)
Net VAT: 5,000 − 4,000 = 1,000 ✓
Total:
Sale Amount: 290,000 + 100,000 = 390,000 ✓
Sale Tax: 43,500 + 5,000 = 48,500 ✓
Purchase Amt: 50,000 + 80,000 = 130,000 ✓
Purchase Tax: 7,500 + 4,000 = 11,500 ✓
Net VAT: 48,500 − 11,500 = 37,000 ✓
GL VERIFICATION (Total VAT movement):
Output VAT on Tax Payable (Cr): 45,000 − 1,500 + 5,000 = 48,500 Cr ✓
Input VAT on Tax Payable (Dr): 7,500 + 4,000 = 11,500 Dr ✓
Net Tax Payable: 48,500 − 11,500 = 37,000 Cr ✓
DR = CR (all transactions):
SI #1001 (VAT-15): Dr AR 345,000 = Cr Revenue 300,000 + Cr Tax 45,000 ✓
PI #2001 (VAT-15): Dr Exp 50,000 + Dr Tax 7,500 = Cr AP 57,500 ✓
SI #1002 (VAT-5): Dr AR 105,000 = Cr Revenue 100,000 + Cr Tax 5,000 ✓
PI #2002 (VAT-5): Dr Exp 80,000 + Dr Tax 4,000 = Cr AP 84,000 ✓
CN #3001 (VAT-15): Dr Revenue 10,000 + Dr Tax 1,500 = Cr AR 11,500 ✓
9. Common Issues and Solutions
9.1 No Transactions Appear
Cause: No transactions with a Tax Code were found within the selected date range, or no Tax Codes exist in the system.
Solution: Verify that Tax Codes are defined in Settings → Tax Codes and that invoices have been created with a Tax Code selected on line items.
9.2 Transaction Appears in Both Sale and Purchase
Cause: A transaction that has both a customer and a supplier (e.g., a Journal Entry referencing both) could potentially be split across sale and purchase columns. However, the system's sale/purchase determination cascade ensures each entry is classified as either sale OR purchase, never both.
Solution: Check the Customer/Supplier fields on the transaction. If both are set, the system uses the Supplier-first rule (Supplier → purchase unless reverse-charged).
9.3 Sale Tax or Purchase Tax Shows Zero
Cause: The Tax Code is configured as Zero Rate, or the transaction was entered with amounts exclusive of tax (AmountsAreTaxExclusive = true) and the tax calculation produced zero.
Solution: Verify the Tax Code configuration. Zero Rate Tax Codes appear in the report with Sale Amounts but zero Sale Tax — this is correct for zero-rated supplies.
9.4 Amounts Do Not Match Tax Summary
Cause: The Tax Transactions report sums individual transaction rows. The Tax Summary report uses the same calculation logic. Both should match exactly for the same period and Tax Codes.
Solution: Verify both reports use the same date range and Accounting Method. If they still differ, a transaction may have been created or modified after one report was generated but before the other.
9.5 Cash Basis Shows Adjustment Entries
Cause: Under Cash Basis, the system converts accrual invoices to cash basis. This process creates "Cash Basis Adjustment" entries that appear as additional rows in the Tax Transactions report.
Solution: This is expected. The Cash Basis Adjustment entries ensure that tax is recognised when cash moves, not when the invoice was issued. The total Sale Amount + Sale Tax should equal the cash received.
9.6 Credit Note and Debit Note Handling
Cause: Credit Notes reduce Sale Amount and Sale Tax (shown as negative). Debit Notes reduce Purchase Amount and Purchase Tax (shown as negative).
Solution: This is correct. Credit/Debit Notes are adjustments to the original transaction. They appear in the same Tax Code group as the original invoice and reduce the totals accordingly.
10. Accounting Regulation Compliance
10.1 IFRS 15 — Revenue from Contracts with Customers
| Requirement | Reference | Compliance |
|---|---|---|
| Revenue measured at transaction price excluding taxes | §47 | ✓ Sale Amount shows the tax-exclusive revenue. Sale Tax shows the VAT component separately. |
10.2 IAS 12 — Income Taxes
| Requirement | Reference | Compliance |
|---|---|---|
| Current tax liability recognised for unpaid tax | §12 | ✓ Sale Tax and Purchase Tax columns track the VAT collected and paid per transaction, providing the data needed to compute the net tax liability. |
10.3 NBR VAT Act 2012 (Bangladesh)
| Requirement | Reference | Compliance |
|---|---|---|
| Output VAT recorded per transaction | §13 | ✓ Every taxed sale appears as an individual row with its Sale Tax amount. |
| Input VAT recorded per transaction | §38 | ✓ Every taxed purchase appears as an individual row with its Purchase Tax amount. |
| Credit/Debit notes as adjustments | §39 | ✓ Credit Notes appear as negative adjustments in the same Tax Code group, correctly reducing the net amounts. |
| VAT return audit trail | §64 | ✓ Every transaction contributing to the VAT return is listed individually with full traceability to the source document. |
10.4 DR = CR Verification
Sample Data Verification:
Each transaction DR = CR:
SI #1001: Dr AR 345,000 = Cr Revenue 300,000 + Cr Tax 45,000 ✓
PI #2001: Dr Exp 50,000 + Dr Tax 7,500 = Cr AP 57,500 ✓
SI #1002: Dr AR 105,000 = Cr Revenue 100,000 + Cr Tax 5,000 ✓
PI #2002: Dr Exp 80,000 + Dr Tax 4,000 = Cr AP 84,000 ✓
CN #3001: Dr Revenue 10,000 + Dr Tax 1,500 = Cr AR 11,500 ✓
Total Debits: 345,000 + 57,500 + 105,000 + 84,000 + 11,500 = 603,000
Total Credits: 345,000 + 57,500 + 105,000 + 84,000 + 11,500 = 603,000
DR = CR ✓
Sale Amount by TaxCode:
VAT-15: 300,000 − 10,000 = 290,000 ✓
VAT-5: 100,000 = 100,000 ✓
Total: 390,000 ✓
Purchase Amount by TaxCode:
VAT-15: 50,000 ✓
VAT-5: 80,000 ✓
Total: 130,000 ✓
End of Tax Transactions Guide