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Tax Accounting

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In Business Central, you can set up and maintain tax registers to track taxable profits and losses. This is based on the following tax accounting principles:

  • The financial database is used for tax accounting.
  • The chart of accounts is used to track taxable profits and losses.
  • Income and expenses are recorded using separate subaccounts and dimensions.
  • Fixed asset transactions and expenses for future periods are tracked using the depreciation book for tax accounting.
  • Tax registers are grouped and totaled monthly. Each register has 12 values for a 12 month tax period.

Because Business Central keeps the history of all transactions, detailed information from a transaction that changes taxable profits is automatically tracked. The information collected in tax registers meets the principles of tax reliability and tax validity.

Tax Registers

There are two types of tax registers that are used for tracking taxable profits and losses.

Tax Register Type Description
Analytic Tax Register An analytic register is based on ledger entries for taxable transactions. The information provides a continuous chronological reflection of business operations, which tracks taxable profits and losses based on tax codes.
Synthetic Tax Register A synthetic register is based on summarized and calculated information from an analytic register or another synthetic register.

Transactions are processed using specific tax accounting principles that are applied to the following types of tax registers.

Tax Register Description
General Ledger Entry An analytic register based on general ledger transaction entries.
CV Entry A group of analytic registers based on information associated with debtor or creditor liabilities.
Fixed Asset Entry A group of analytic registers based on tax data for fixed assets. This group is created by using a fixed asset ledger and a tax depreciation book that is not integrated with the financial accounting ledger.
Item Entry An analytic register based on posted item transactions.
Future Expense Entry A group of analytic registers based on tax data for future expenses. This group is created by using a fixed asset ledger and a tax depreciation book that is not integrated with the financial accounting ledger.
Accumulation A synthetic register based on calculated algorithms defined during tax register set up.

See Also

Set Up Tax Accounting
Tax Registers
Create Tax Registers
Set Up Tax Register Sections
Tax Differences
Accounting for personal income tax payments
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