If no tax adjustment for payment differences is to be made to the accounts for payment transactions (for example, cash discount received, cash discount paid, or unearned deductions), you may not make an entry in the Tax category field in the account for cash discount posting. Otherwise, the system makes a tax adjustment automatically when payment transactions are made. With postings with a jurisdiction code, all accounts for cash discount paid and received must be non-tax-relevant. For more information, see Tax Adjustment for Payment Transactions.

When you enter a tax code, you assign a fixed tax rate to the account. If you enter the code "V1", for example, postings can only be made to the account with this code. The code from the master record is output when a posting is made to the account and can no longer be changed. You should only define a fixed tax rate for G/L accounts in exceptional cases, such as for the account "Domestic travel expenses taxed at a flat rate" in Germany, since otherwise not only new codes, but also new G/L account master records must be created when making a change to the tax rate.

If you do not want to assign a fixed tax rate to a G/L account, you can use your entries to make the following specifications:

Indicator	Meaning
<no indicator>	Not tax-relevant
-	Only postings with input tax codes are allowed. Cost element accounts are managed with this indicator, for example.
+	Only postings with output tax codes are allowed. Revenue accounts are managed with this indicator, for example.
*	All tax codes are allowed.
-B	Account for gross vendor down payments. Offsetting entry for the tax amounts is made on separate clearing accounts. For more information, see Tax on Sales/Purchases for Down Payments.
+B	Account for gross customer down payments. Offsetting entry for the tax amounts is made on separate clearing accounts. For more information, see Tax on Sales/Purchases for Down Payments.