In case of standard taxes, the taxes are due at the validation of an invoice but in the case of cash basis taxes, the taxes are due only when the payment has been done on the invoice. This method is to be chosen depending on the strategy employed in the company/business which directly depends on the legal entities set up in the country.

Configuration:

• As a first step, the setting for cash basis taxes has to be activated under 

Accounting->Configuration->Settings->Cash basis

Note that the journal for the Cash basis is ‘Cash Basis Taxes(USD) journal

• Create two accounts - a temporary tax holding account and a Nett Tax account to post the base tax amount for an accurate report.

Say the temporary tax holding account to be Tax Interim (of the type Current liabilities)

And the Nett tax account to be Tax Nett (of the type Expenses)

Make sure to Allow Reconciliation as well.

• Configure taxes in Accounting->Configuration->Taxes.

At first set the proper transitional accounts to post taxes until you register the payment.

In the Advanced options, Set the following,

Tax Due: Based on Payment

Base Tax Received Amount: 251027 Tax Nett account

Cash Basis Transition Account: 251016 Tax Interim 

• Validate and verify the journal entries due to this configuration,

Customer invoice:

Payment:

Cash basis Taxes(USD) journal:

Also, to be noticed that the Tax report wouldn't have reflected any value until the payment is registered on the invoice. After registering payment, Tax report reflects the value.