Tax Authority

Every time you post a taxable invoice, CifraHQ needs to know where to park the collected tax until you pay it to the government. The tax authority record links the government entity (e.g., Panama DGI) to the GL liability account where that money sits — so your tax payable balance is always accurate and your remittance is never a guessing game.

How to create a Tax Authority

1. Go to Master Data > Accounting > Tax Authority.
2. Click New.
3. Enter the Name of the authority (e.g., DGI Panama).
4. Select the G/L Account — this is the liability account where collected sales tax accumulates until you remit it (typically your "Sales Tax Payable" account).
5. Save.

What each field means

• Name — the name of the government tax body. Appears on Reports and remittance summaries to make it clear which jurisdiction you're dealing with.
• G/L Account — the general ledger liability account for collected tax. Your accountant will advise which account to use. A typical choice is an account labelled "Sales Tax Payable" or "ITBMS Payable." This account is credited every time a taxable invoice is posted, and debited when you record a remittance payment.

Tips

• Most businesses have one tax authority. If you operate in multiple jurisdictions with separate remittance obligations — for example, collecting VAT in one country and sales tax in another — create one tax authority per jurisdiction, each with its own GL account.
• The GL account you choose here is the bridge between your daily invoicing and your periodic tax remittances. Make sure it's a dedicated liability account, not a general expense account.

Next: Tax Codes