Understanding Tax Information for General Ledger Accounts

If you track taxes by tax rate/area, you must specify that the general ledger account is taxable by selecting the Taxable Account option on the account. When you specify that an account is taxable, the system enables you to specify a default tax rate area to use. The system uses the tax rate area for the account for journal entries that the system automatically generates or when the corresponding field is left blank on the distribution form of the voucher or invoice and you have specified to track taxes.