We recommend a simple approach to estimating corporate and sales taxes for business planning purposes. LivePlan uses a single flat percentage to calculate each of these.
If you're outside the U.S., you may need to represent a more complex sales tax system, such as the VAT, HST, or GST in your forecast. LivePlan isn't able to track the tax payments and credits involved in these types of taxes in detail. Still, you can use the flat-percentage model to get a reasonable overall estimate of your taxes for forecasting.
To represent sales tax credits, or taxes paid on expenses and asset purchases, we usually recommend determining the difference between taxes paid and tax credits, and using that as your flat sales tax percentage in LivePlan. So, for example, if you usually charge 25% VAT/HST/GST but get a 5% tax credit, the cumulative difference is 20%. Using that 20% as your sales tax setting in LivePlan should get you a close estimate of your tax liability. Tax can be set to pay out monthly, quarterly, or annually.
Note: with this approach, all taxes will appear on the Sales Taxes line of your Balance Sheet and Cash Flow. LivePlan isn't configured to generate a separate line for VAT.