In some countries, the government declares that large customers of small suppliers are required to remit tax amounts directly to the government instead of to the supplier. Customers of these suppliers pay the purchase amount minus tax to the supplier but are required to calculate, post, and periodically pay the tax amounts on their purchases directly to the government.

Use Tax Rate Maintenance to specify the GL accounts and sub-accounts for AP Retained Tax. To designate a tax rate as a retained tax, set the field to Yes.