Input/Output Tax Transaction

February 18, 2009 by mySAP
Filed under: SAP Knowledge 


Input Tax is occurred when purchasing goods or service, transaction will be as follow:

Dr. Expense / Inventory acc
Dr. Input Tax (Receive from goverment)(Paid to vendor as tax)
      Cr. AP

Output Tax is occurred when sale goods or service,  transaction will be as follow:

Dr. AR
      Cr.Revenue
      Cr.Output Tax (Pay to goverment)

 

What is the difference between input and output tax?

Input Tax is receivable account but Output Tax is liability account. At month-end, Input tax is offset with output tax and balance have to pay/receive the goverment.

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