Setting up new Tax Rate for Quebec in Moneyworks

NOTE: The previous post was incorrect this update hopefully corrects that.

Rate change starting Jan 1, 2013 : As of January 1, 2013, the provincial rate will no longer be applied to federal GST, but it will be increased to 9.975% to compensate.

The existing tax codes in MoneyWorks will record the new tax rates correctly as the resulting tax rate remains the same, e.g. 14.975%

However if the Quebec government decided to change the tax rate in the future, changes would have to made to the MoneyWorks tax codes. So your choice is to do nothing until the next tax rate change or do a change now that will allow you to more easily manage tax rate changes in the future. Your choice.

Read on to see how to make the change now.

Changing the tax calculation now:

Open the tax rate window,(Show menu > Tax Rates and you will see the current rates as shown below [Green Arrow].

Double click the Q tax code [Red] and it will open [Blue Arrow]. Change Rate 1 to 9.50 [Orange Arrow] > Change Rate 2 to 9.975 [Purple Arrow] and set the Change Over date [Red Square] to January 1, 2013. Click OK to close the Tax Code window and then….

Changing QST

In the Ta Rates window click the New icon [Red Arrow] and a new empty tax code window will open [Green}. Note it will not look the same as below until you complete these sets.

  • Assign a new unique code e.g. T2 [Blue arrow} Note you have three characters.
  • Name the combination tax [Red  Square]
  • Set the Tax type [Orange Arrow} to Composite Tax as shown below.
  • Click the Add a line icon [Purple Arrow]
  • Type G and push your tab key on your key board entering the GST name and rate
  • Click the add a line icon again
  • Type Q in the second row and push your tab key on your key board
  • Click OK closing the Tax Code Window and then OK on the Tax Rates window

New Combined GST & QST

Note: In a Composite tax the GST must always be entered first.

Setting the new Composite tax as the default tax in your chart of accounts. In other words we have to replace the existing T code that was assigned to income, expense account etc. with the new Composite T2 tax code we created.

Open your Accounts list (Show menu at the top of your computer screen) Accounts.

  • The accounts window will open {red Arrow]
  • Click the Find icon [Green Arrow]
  • The find window will open {Blue Arrow}
  • Select “Tax Code” from the drop down list [Purple arrow]
  • Select “is” from the centre drop down {Orange Arrow]
  • Type “T” [Red Square}
  • Click the Find button [Black Arrow]

Changing default tax codes

  • All accounts with a tax default of T will appear in the Accounts window [Red Square}
  • Highlight all accounts (Apple Command key + A) or (Windows Control Key + A)
  • Go the Select Menu [Green Arrow] Click Replace [Purple Arrow]
  • The Replace Window will open [Orange Arrow]
  • Choose TaxCode from the drop down List
  • Type T2 (your new composite tax) [Blue Square]
  • Click Replace [Black Arrow]

Replacing Tax Code

A warning will appear asking if you are sure you want to replace the Tax Code field for the selected number of accounts, click the Replace button and you are done.

Now if the Quebec government changes future provincial tax rates, you will just change the Rate 2 of the Q tax code to the new rate and put the actual Change Over rate,

Let me know if you have any questions.

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