Output sales tax
Output tax is sales tax charged by a taxable business on its sales and generally owed to the tax authority. In a basic credit sale, debit the customer for the total including tax, credit revenue for the amount excluding tax and credit output tax for the tax charged. When preparing a tax return, eligible input tax is normally offset under local rules.
Worked example
A 100 taxable sale at 20% creates 20 output tax.
Common mistake
It is normally a liability, not revenue; input tax may be offset if recoverable under the applicable rules.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | F1 | Direct | July 2027–August 2028 |
| ACCA | FA | Direct | September 2026–June 2027 |
| ACCA | K1 | Direct | July 2027–August 2028 |
| CIMA | BA3 | Direct | Official assessment-window verification pending |
| FIA | FFA | Direct | September 2026–June 2027 |