How to do vat reverse charges in Wave?.
Wave doesn't have features to handle VAT reverse charges, so they aren't currently supported. There's no way to input a negative tax rate in Wave for now.
You might be able to come up with a workaround, but when it comes to situations related to taxes, it's always best to discuss it with an accountant. They know much more than we do about your local regulations, and they'll be able to help you get around this limitation better than we could.
With that said, I'll pass your comment along as feedback to our product team.
I was very confident Wave was the right choice for me, until I discovered it can't handle Withhold Taxes!!
That's a real problem, and will possibly force me to choose another system...
I'm operating in Spain, and when paying my rent to the landlord of the premises, the bill comes with a withhold tax; amount that I will have to pay to the authority on the owner's behalf.
It works about like this:
Invoice (Bill) received example:
Monthly rent = 1000€
Base = 1000€
VAT (21%) = +210€
IRPF(-19%) = -190€
TOTAL = 1000+210-190 = 1020 €
I would need a way to track/log all IRPF amounts, in a similar way than with VAT, since it needs to be declared to the Tax department every quarter.
Researching this community forum, I realise I'm not the only one suffering from the absence of this essential feature.
Any update/comment on a potential fix?
Given our accounting and invoicing software is global, it's very hard to handle nuanced tax systems that can arise region-by-region. You are able to open as many Sales Taxes as you would like in Wave but even then I don't think they'd truly meet your needs in terms of the IRPF amounts. We have this general guide for handling tax remittances which may help. With that said, it was drafted with a caveat that it may not apply to all businesses.
Its not as complicated as you might think. When you post your rental payment create a separate journal entry for the tax deduction, debiting the deduction to rent and then crediting withholding tax (or whatever you wish to call the account) under liabilities. Whatever the 3 month period is that you have to make remittances for simply bring up the liability account in reports (specifying the date range) and pay the amounts entered over to the tax authority. The payment to them is then entered as normal but you simply select the liability account you created for the analysis of the payment. This way you should always know where you stand.
Hi Andrew, thank you for your workaround advice!