Tax Report vs Income Statement Differences

Created by Level 1 Support Team, Modified on Sun, 10 May at 2:49 PM by Level 1 Support Team

To help you understand and resolve the differences you are seeing between your Tax Report and Income Statement, please review the points below. These checks will help identify the exact reason for any mismatch.

1. Confirm Whether Any Sales Were Recorded Without VAT

Sales that are created without VAT will appear in your Income Statement, but they will not appear in the Tax Report.

Please check:

Whether any invoices or receipts were created without VAT
Whether any items in those invoices were marked as No VAT / Without Tax

You can verify this by opening your Sales Item Detail Report for the affected month and reviewing which items include VAT and which do not.

2. Check If You Are Using the Customer Advance Module

If you record Customer Advances, these entries affect the Tax Report but do not affect the Income Statement, because they do not post to the income ledger.

Please check:

Whether you recorded any customer advances during the affected month
The total amount of those advances
Whether this amount matches the difference you are seeing

You can verify this by opening the Customer Advance Module and filtering by the relevant date range.

3. Review the VAT Type Used in Your Sales

Different VAT types behave differently in the Tax Report:

Standard VAT → Included in Tax Report
Zero‑Rated VAT → Included in Tax Report
Exempt VAT → Included in the Exempt section of the Tax Report
Without VAT (No Tax) → Not included in the Tax Report

If any sales were recorded as “Without VAT,” they will not appear in the Tax Report.