TAXES PENDING PAYMENT: MAIN CHARACTERISTICS - JOB - 2025

The outstanding tax payment is a settlement account which represents financial commitments that a company with the State corresponding to the payment of taxes.

This account is classified as a fraction of the company's liabilities; that is, it is part of the debts of the company.

All companies have tax duties with government entities. Depending on the legislation, the tax burden varies in each country.

Among the most common taxes in Latin America are value added tax (VAT), income tax (ISLR) and taxes on labor income.

The latter include taxes on social security contributions, as well as payroll taxes and monetary benefits.

Tax account payable

This accounting account records the taxes that have not yet been paid by the company to the national treasury in a specified period.

This provision also includes tax withholdings that have not yet been canceled, in case the entity is a special withholding agent.

In this case, the company has the obligation to withhold a percentage of taxes (VAT, ISLR, among others) on the commercial invoices they receive, and directly declare the cancellation of these commitments to the treasury.

Accounting entry for taxes pending payment

Taxes pending payment, also called taxes payable, always come from accounts payable, either from suppliers or creditors, and are recorded as a current liability.

Current or current liabilities are those commitments that have a close due date; that is, in the short term. Taxes payable must be declared and paid exhaustively within the same fiscal year.

The length of the fiscal year may vary depending on each country, but generally this type of tax returns are carried out within the same month.

How do I register an account for pending taxes?

When recording tax burdens pending payment, it is necessary to determine the following guidelines.

The "must" must include the value of the tax that the company owes to the treasury or the relevant government entities.

The debits must be added to the left of the ledger account. These records must be supported by the supports and / or statements that correspond to each case.

For its part, the "credit" is the right section of the accounting account where the creditors of the company are registered. The total amount of all taxes must be recorded on the credit.

The foregoing includes the tax burdens borne by the company, as well as withholding taxes on wages and salaries, and withholding taxes on commercial documents (invoices, credit notes, debit notes).

In the event that the amounts totaled in the credit are greater than the debit records, a credit balance is generated.

This balance represents the value of the final tax commitment that the company has with the tax authorities and other state duties.

References

1. Chapel, M. (2007). Private Study of Accounts: LIABILITIES. Recovered from: mcapi-conta1.blogspot.com
2. Classification of asset, liability and stockholders' equity accounts (sf). Recovered from: ingenieria.unam.mx
3. Examples of Accounts Payable (2017). Recovered from: examplede.com
4. Martínez, J. (2015). Accounts for taxes in favor in the chart of accounts and in the Grouping Code. Recovered from: soyconta.mx
5. Martínez, M., Rivas, O., and Navarro, R. (1998). Design of a tailored accounting organization system for non-governmental organizations (NGOs), which are dedicated to financing and technical assistance in the metropolitan area of ​​San Salvador. Recovered from: ri.ufg.edu.sv
6. Liabilities (2013). Recovered from: admicontaest92.files.wordpress.com