Use the Tax Accounting window to enter additional accounting information about your tax codes and tax locations. You can specify expense, revenue, and non–recoverable accounts for your adjustment, finance charge, and earned and unearned discount activities. You can also use the Tax Accounting window to set up deferred tax, an accounting method in which tax is due when payment is applied to an invoice, rather than when the invoice is created.

If you use tax codes, use the Tax Accounting window to assign tax accounts to your tax codes. If you use location–based tax, use the Tax Accounting window to assign tax accounts to your tax locations. To record tax on adjustments, discounts, and finance charges, specify an expense or revenue account and a non–recoverable account. The non–recoverable account records decreases in the total amount of tax that you collect for activities that the government does not consider a
legitimate tax deduction.
Suggestion: You can define regular or deferred tax accounting for existing tax codes. To do this, select the tax code to modify, then disable it by entering the current date in the To field.  Create a new record, then choose Duplicate Record Above from the Edit menu. Enter a new effective date range then define additional tax accounting for this tax code.

To use deferred tax accounting, use the Tax Accounting window to specify an Interim Tax Account. When you create an invoice, Receivables accounts for the liability in the Interim Tax Account. When you apply a payment to the invoice, Receivables automatically transfers the tax liability to the Tax Account.
Attention: If you are upgrading from a previous release of Oracle Receivables, you cannot update the tax accounting for
transactions that have a status of ’complete.’ Once a transaction is complete, Receivables creates all corresponding accounting entries and does not let you enter a different tax code or modify the existing accounting information.