Are we able to create TAX CODES and link them to specific TAX LIABILITY ACCOUNTS?
At the Moment all TAX CODES are tagged to TAX Payable only…
Help please
You can. The technique is described as part of this Guide: Work with multi-component custom tax codes | Manager. The Guide focuses on multi-component tax codes. But the technique of passing transactions through the Tax payable account to dedicated liability accounts will work for any custom tax code.
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Oh wow, I’m impressed with this feature. I didn’t know it was there.
Are there any possible drawbacks if I use it to set up separate tax codes and accounts for sales and purchase invoices?
New tax codes you create will not be picked up by any country specific localisations. I believe you can edit the existing ones.
No. I use this configuration with my businesses. The only thing is that you should compensate periodically credits with debits.
Not as long as you are careful about where you post tax remittances. And you need to be sure you are properly accounting for whether the tax is offsetting (on purchases versus sales) or not.