What is input tax in SAP FI - Financial Accounting?

SAP Term: input tax

• Component: FI

• Component Name: Financial Accounting

• Description: A tax that is charged by the vendor. A claim for refund of the deductible portion of input tax can be submitted to the tax authorities.

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• Key Concepts: 
  Input tax is a type of tax that is paid by a business on the purchase of goods and services. It is also known as VAT (Value Added Tax) or GST (Goods and Services Tax). In SAP Financial Accounting, input tax is recorded in the system as an expense and can be used to offset the output tax that is collected from customers. 
  
  How to use it: 
  In SAP Financial Accounting, input tax can be recorded in the system by creating a vendor invoice. The invoice should include the amount of input tax that was paid, as well as any other relevant information such as the date of purchase and the vendor name. Once the invoice is created, it can be posted to the general ledger and the input tax amount will be recorded as an expense. 
  
  Tips & Tricks: 
  When recording input tax in SAP Financial Accounting, it is important to ensure that all relevant information is included in the vendor invoice. This includes the amount of input tax that was paid, as well as any other relevant information such as the date of purchase and the vendor name. This will ensure that the input tax amount is accurately recorded in the system. 
  
  Related Information: 
  Input tax can be used to offset output tax that is collected from customers. Output tax is a type of tax that is collected by a business on the sale of goods and services. In SAP Financial Accounting, output tax can be recorded in the system by creating a customer invoice. The invoice should include the amount of output tax that was collected, as well as any other relevant information such as the date of sale and the customer name. Once the invoice is created, it can be posted to the general ledger and the output tax amount will be recorded as revenue.