During transaction processing, the tax point for the tax rate determines when and for which accounts the system creates GL entries for tax amounts. The tax point defaults first from Accrue Tax at Receipt in Global Tax Management Control (29.24), then from the same setting in individual tax rate records (29.4.1).

When the tax point is goods receipt, the system creates GL entries when you record the receiving transaction. When the tax point is invoice receipt, the system creates entries later—when you enter or finalize a supplier invoice.

For each tax point, exact GL entries vary by cost system. Elements that Influence GL Entries for Each Tax Point summarizes the elements that influence GL entries. The subsequent sections for standard costing and average costing illustrate tax accruals in more detail.

Tax point also affects the cost basis for average cost calculations. The system re-averages item costs at both receipt and when you finalize the supplier invoice. If the tax point is goods receipt, the cost basis for re-averaging calculations includes tax at both receipt and receiver matching. However, if the tax point is invoice receipt, the cost basis includes tax only at receiver matching.