To manage your Input Tax allocable to Exempt Sales (Schedule 5), follow these steps:
STEP 1: Go to your Dashboard, then click on Transactions
STEP 2: Click on Add Transaction > Add Manual > Sales
Note: There are 2 ways to add a transaction; Add manual and Import CSV. And, there are 3 types of transactions; Sales, Purchases, and Journal. For this example we will add a manual transaction under Sales.
STEP 3: Fill out the table shown and select the correct Tax Type. In this transaction make sure the tax type is set to Tax Exempt Sales. You can do this for both Goods and Services type of transactions.
STEP 4: Entering the transaction will enable Schedule 5 in the Summary of your VAT Report. To view this go back to your dashboard > click Value Added Tax Return > Select the Monthly Value Added Tax transaction you made earlier, then Click the Edit Schedule 5 button to continue
Once you clicked "Edit Schedule", Input Tax Attribute to Exempt Sales window will appear.
STEP 5: Fill out all the necessary information
In order to get your Total Input Tax Attributable to Exempt Sale (To Item 20C), you need to subtract your Input Tax directly attributable to exempt sale with your Amount of Input Tax not directly attributable, which can be achieved by using this formula: [Tax Exempt Sale / Total Sales X Amount of Input Tax not Directly Attributable]
STEP 6: After you have entered your details, you can simply click the Save button to update the Schedule 5 of your 2550M form