on 08-13-2008 4:39 PM
Hi everyone,
Can any one provide me guidelines how to configure tax determination and what are the prerequisites for configuring the same. It would be beneficial for me if you send step by step procedure to me.
Points assured
SUNANDA.P
Hi,
Tax Determination is one of the SD - FI Integration.
FI Team creates calculation procedure and assign this calculation procedure to Country key.
They have to create Tax code by using transaction FTXP.
Define Tax Determination Rules :
You specify the valid tax types in transaction OVK1. More than one tax type can be defined for a country by defining the sequence.
The SAP System determines the taxes automatically within pricing.
In the standard SAP R/3 System, the elements of tax calculation are predefined (for example, tax condition type "MWST" for taxes on sales and purchases).
Assign the plant for Tax Determination in OX10, using the country key, the SAP System recognizes which tax type is valid for a plant and thus which taxes are relevant when creating an SD document.
Define the Customer Taxes in OVK3, you will maintain the tax code in Customer Master.
Define the Material Taxes in OVK4, which will then be maintain in Material Master.
For example :-
MWST GST 0 Tax Exempt
MWST GST 1 Liable for Taxes
Now, you define the Tax Determination in VK12.
VK12 - Domestic Taxes/Export Taxes
Condition Type MWST
Customer Taxes Material Taxes Rate Taxes
0 0 0 %
0 1 0 %
1 0 0 %
1 1 9 %
In this example, if both the Customer Master and Material Master Tax code is 1, Tax will be included when you create the Sales Order.
Tax Code in Customer Master / Sales Order
How can we maintain the Tax Code (Tax code - which we maintain in MWST Condtion Records) in Customer Master or in Sales Order?
There are few points which I would like to remind you:
1) MWST is a tax condition which is applied to customer to whom we are selling. The rate of tax is depend on various parameteres, whether is fully liable for tax or expemted (in case of Defence Customer)
2) There are few parameteres which we apply tax condition. Whether customer is tax liable? Whether material is tax exempted?
For example, if you are selling a goods which are free for tax to any customer, put the Tax Indicator (at MMR as '0'). If your
material is tax liable pur the Tax Indicator (at MMR as 1). If your customer is not liable for tax at all (like the case of Indian
Defence organisations) put the Tax Indicator (at CMR as 0) or 1 in case fully tax liable.
3) Now, at VK11 you need to mainatain your pricning conditions with all the combinations like:
1 0
1 1
0 1
0 0
4) While maintaining your Material Master Records or Cusotmer Master Records, you must identify, which are tax liable and which are tax exempeted.
5) In anycase, as a SAP standard Best Practises, while processing a sales order, you must retrieve a Tax condition record from SAP database only and not entered Manually. Accordingly, at V/06, the MWST condition Defintions, the field for 'Manual Entries', it would be marked as - D (Not possible to process Manually).
Due to this setting, normally, you cannot maintain Condition tax code during sales order processing. And in Cusotmer Master, you can only maintain Tax Indicator and not Tax Code.
6) In case your client insists for Manual entry of Tax code during Sales Order processing, you can change the field at point 5) above to C-Manual entry is priority instead of D.
Chandramohan
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Hello Sunanda,
Tax is actually Country specific. However, will try to tell you a generic approach:
SAP automatically determines and calculates taxes based on the organizational structure, country, region, or city of delivering plants and country of receiving customer, in combination with tax relevancy indicators on the customer master record and material master record.
All the settings will be done at SPRO| Sales and Distribution | Basic Functions | Taxes.
The steps:
1) Define Tax Determination Rules: you must assign the relevant tax condition types to the country key. The system will only list condition types that are regarded as u201Ctaxesu201D in the
condition class of the condition type. After you have assigned the tax condition types or categories, you must ensure the
condition types are placed into the relevant pricing procedures and that the associated tax condition records are created/maintained.
2) Define Regional Codes: As some countries may have county and or regionalized taxes, it is possible to state specific
regions within a country code.
Define County Code, cit code--if applicable.
3) Assigning Delivering Plants for Tax Determination
4) Defining Tax Relevancy of Master Records-Customer Taxes
5) Defining Tax Relevancy of Master Records-Material Taxes
Then, go ahead and create Tax Condition Records using VK11.
Tax Integration with Financial Accounting
This is generally done by FI consultants--integration with FI.
There are numerous tax settings to be maintained in the FI (Finance) module in SAP.
These settings are related to outbound and inbound taxes, and are split into three sections within the IMG:
u2022 Basic Settings
u2022 Calculation
u2022 Posting
Path: SAP Customizing Implementation Guide | Financial Accounting | Financial Accounting Global Settings | Tax on Sales/Purchases.
I hope this helps.
Rgds,
Rags.
Hi,
My pricing procedure uses MWST as the condition type for output tax. However, MWST doesn't appear in the Conditions tab in my SO during testing, thus the tax amount doesn't reflect.
I've already added the condition record for MWST in VK11 for both material & customer tax classification. Both material and customer have the same tax classification.
What could be causing this?
Thank you so much!
Hello,
your reqeust is country-specific.
But it would be useful if you have a look in the following transactions for the standard maintainance.
V/06 - here you should define the condition type
V/07 - here you can define the access sequence for the condition
V/08 - her you can define the pricing procedure.
Please look at the standard pricing procedure for the relevant country and check which tax conditions are included.
The you should have a look in transaction V/06 and V/07 how should the relevant taxcondtion maintained.
I hope that the information are helpful.
regards
Claudia
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