When your organisations tax return is prepared each year, by you or your Advisor, they may establish that you have under paid (or over paid) Income tax during that financial year. In which case you will need to pay money to your Tax Authority (or receive a refund). You or your Advisor may enter this into your accounts as an General Journal representing the amount due to be settled with the Tax Authority. Here is a generalised example where ACME Rockets Pty Ltd learns after having their tax return prepared that they owe an extra $1000 in company income tax to their Tax Authority:

1. You or your Advisor enters a General Journal reflecting this amount owed to the Tax Authority.
   

   CREDIT	Loan: PAYG Installments Payable	no tax code	$1000
   DEBIT	Other Expense: Income Tax Paid*	no tax code	$1000

   ^{* You may need to create this Account}

2. You then enter a Purchase for this payment where you select the Account to be Loan: PAYG Instalments Payable

Alternately to steps 1 and 2, some Advisors may prefer you to just enter a single Purchase transaction for the payment where you select the Account to be Other Expense: Income Tax Paid