Depending on the legal specifications of your country, you may or may not have to post tax on down payments. If you generally do not have to post tax on down payments, you can suppress the tax fields via the special G/L account (down payment account) as follows:

You can create the master records with an account group, via which the field Tax category is suppressed for the master record. You cannot then fill the field when you create the master record.

You achieve the same by leaving the Tax category field in the master record blank. By doing this, all fields on tax are suppressed in the entry screens. For more information on the layout of the screens, refer to the section "G/L account master data" in FI - General Ledger Accounting.

If you post tax, you must define whether the down payment is to be displayed with or without tax in the open item and special G/L accounts.

With net display, the down payment is posted to the open item and down payment accounts without tax. The tax is posted to the input or output tax account.

With gross display, the down payment is posted to the open item and down payment accounts with tax. The tax is posted to the input or output tax account. To clear the tax, the system also posts the amount automatically to a tax clearing account.

Gross display has the advantage that the down payment amount is displayed in the open item account with tax and consequently the entire amount of the payable or receivable is displayed.

You decide whether the display is always net or gross via the down payment accounts. In these accounts, you enter a corresponding indicator in the field for the handling of tax.

With net display, the down payment is displayed net on the balance sheet.

With gross display, you must transfer the down payment accounts to a balance sheet item using the corresponding tax clearing accounts. By doing this, the down payments are displayed net.

The prerequisite is that you manage a separate tax clearing account for each down payment account (special G/L account indicator). Clearing accounts are generally managed on an open item basis. You should not select this option for tax clearing accounts. Since the accounts are only posted to automatically, it is not necessary to control open items.

The system posts the tax automatically. That is, it determines the tax and clearing accounts when you post the document. You must define the numbers of the accounts in the system beforehand. You must differentiate the clearing accounts by down payment type (such as the special G/L indicators I and A) and by consolidation and non-consolidation companies. To do this, you specify a two-digit key, which groups this information, when you enter the numbers of the special G/L accounts. You enter this key when you enter the clearing accounts for tax.