Tax Control Accounts Overview
Tax control accounts are accounts in your general ledger or chart of accounts. These are the accounts to which the amounts computed for indirect taxes such as sales tax and VAT are posted.
Tax control accounts are used to define tax types, and tax types are used to define tax codes. Tax codes in your transaction records determine how much tax is applied to each line item on your transactions.
If the Advanced Taxes feature is enabled in your NetSuite account, tax control accounts are linked to a nexus or country to more effectively manage tax postings.
In NetSuite, the tax control accounts are either already set up by default, or set up for you by Professional Services. However, an administrator can create new tax control accounts if necessary.
You can use multiple tax control accounts to track your sales tax liability and provide more detail on your financial statements. For example, for US customers, you can create tax control accounts for each tax jurisdiction and assign them to their respective tax codes.
You can choose to separate your sales VAT and purchase VAT. For example, for UK customers, you may want have an Output VAT account to track VAT on your sales, and an Input VAT account to track VAT that you can reclaim.
Some users may prefer to see the balance due at any point in time. In this case, you need only one account that would consolidate all your VAT or GST entries.
Examples of tax control accounts are shown in the related topic, Tax Types Overview.
To create a tax control account, see Creating a Tax Control Account.
To remove restrictions for tax control accounts on tax types, see Removing Restrictions for Tax Control Accounts.
When you inactivate a tax control account, any tax codes associated with it will no longer be available for selection when you create or edit a transaction record. Also, any existing default tax codes associated with the inactivated tax control account will be invalidated. Be sure to change the default tax codes on the affected nexuses, item records, customer records, and vendor records. Alternatively, you can re-activate the tax control account.