How to set up VAT on purchases so i can offset with VAT on sales

Hello, ibrahim2.

I do hope you're having a wonderful day today. I can definitely show you how to set up VAT on purchases to offset it with the rate on sales. 

The steps depend on whether or not you've already set up VAT in your company file. 

If you've already set up VAT on sales, you would want to add a new custom rate. You'll want to enable This tax is collected on purchases, then enter a rate. Here's a step-by-step process: 

1. Go to Taxes from the left panel. 
2. Click the Add tax button at the top right side of the screen. 
3. Enter the Tax Name, Description, number, and filing mechanics. 
4. Check This Tax is collected on purchases, then enter your rate. You also have the option to check "Purchase tax is reclaimable." 
5. Once done, click Save. 

You can group the new custom tax with your existing sales VAT rate. This can make your task easier when creating transactions. Here's how to do it: 

1. In the Taxes page, click the Add tax button again. 
2. Choose Group rate. 
3. Enter the Group name and the Description.
4. Select your VAT on sales and purchases for each individual drop-down menus.
5. Choose the applicable VAT mechanics for your rates.
6. Once done, click Save. 

In the event that you're still setting up your VAT rates, you'll simply want to check This tax is collected on purchases in the setup screen. Here's how:

1. Go to the Taxes menu.
2. Click the Set up tax button. 
3. Add the Tax name, Description, agency name, and other important details.
4. Enter the Sales rate for your VAT.
5. Check This Tax is collected on purchases and enter a new rate. Tick the Purchase tax is reclaimable if necessary. 
6. Once done, click Next. Hit OK on the next page to complete the setup process. 

If you'd like to know more about the VAT or Tax feature in QuickBooks Online, you can check this article here. 

When you're done setting up your VAT rates for purchases and sales, you're now ready apply them on transactions. Here's an example: 

You can check out these articles if you need help recording your transactions: 

• Manage Suppliers and Expenses
• Manage Customers and income

I'm willing to work with you again if you need help with the taxes or VAT. I also welcome any questions you might have on other areas in QuickBooks Online.