Tax related account

Question

hi,
1) what is the use if the account has tax category maintained in fs00?
when i do miro, if the expense account is tax relevant account, then tax amount will be calculated when click calculate tax button.
if the expense account is not tax relevant account, then tax amount is 0 when click calculate tax button.
correct?
2) dr expense 100 cr vdr 100
    with tax 5% then
    dr expense 100
    dr tax            5
    cr vdr          105
    although the account is subjected to tax, the expense account  amount still the same. so what does it mean subject to tax?
thanks

Answer 1

hi
If the a/c has tax category mentioned in fs00 the system determines
1) if the a/c has to be used for tax-relevant postings,
2) if it is a tax a/c .
In option one, you can classify the G/L account for output tax only OR for input tax only OR permit both input and output tax.
To answer your second question, yes the expense a/c serves as the base to calculate the tax, even though the tax amount is not added to it but posted to the relevant tax a/c.
I hope this helps.
Regards
Kavitha