How to setup tax account?

[Former Member]

Dear Experts,

I'm new in FI. I want to know how to setup tax account for output tax and input tax? Example, it should be P&L or balance sheet A/C? need to create cost element or not? ....

Thanks a lot!

[Former Member]

I solved it. Thanks a lot!

[Former Member]

Dear all,

Output tax account will charge to customer and input tax account will charge to vendor. Then, what should they be P&L or balance sheet a/c?

Thanks a lot!!!

[PRASANTH_GOP9]

Hi Tam,

Both Input and Output tax accounts must be Balance sheet accounts. Since these accounts relate to the financial position of the company i.e.how much the company should pay.

If input tax is more than output tax, you can get returns by submitting the tax returns report to government.

If output tax is more than input tax, you need to pay the tax to government.

Hope this is clear.

Regards,

Praisty

[Former Member]

hi

Receivebale/ Payables are Balance sheet account

Revenue /expenses are profit and loss account

Depends on nature of account we have to create the GL account.

nagesh

[Former Member]

Hi, guy

T-CODE FTXP to create tax code under your country code. you can assign G/L account for each tax code.

BR

Thomas

[Former Member]

Hi

P&L or B/S would depend on the nature of tax. If it is to be expensed out then you would create it as a P&L & CE

If it is to be deducted and paid to government or if the tax is taken as credit then it will be a B/S a/c (no CE)

Thank You,