Tax Code in relation to Accounting

[Former Member]

Hi All,

We have several condition types maintained several records VAT REA (Recycling Administration). My question is, I would like to know what is the relation of Tax Code to the accounting? How is it related?

Thanks

[Former Member]

Hi,

I assume that you are using TAXINN tax procedure and you are refering to standard tax conditions:

Tax code is responsible following few ways to SD accounting.

1) at OB40, based on the different tax codes you can determine different G/L accounts for a single account key.

e.g if you have wide range of materials with different characteristics e.g coal , fuel etc.

then in that case of different materials CST/VAT rates will be different then in that case if your client is looking for separate G/L account for each rate, then using Tax code you can determine diffrent G/L account at OB40 configuration.

2) If you will not maintain the output tax code at VK11 for respective condition records for tax conditions system will not post the accounting Document.

Along with the above mentioned use of taxcode, At Sales Tax Register J1_ISTAX, using the above mentioned configuration(point 1) you can get sales tax register.

Thank You,

RB

[Former Member]

hi,

the relation of tax code to accounting is:

in FS00 - you will need to specify the tax category whether it has to pick only input/output or all taxes to be allowed.

in FTXP you will maintain the tax % against the condition types.

in condition types you will specify MWS (taken Standard) account key.

in Revenue account Determination you will be specifying the taxes G/L accounts against the account keys.

in this combination and posting keys and G/L accounts the amounts in the sales order is divided and posted according to the thumb rules given by you RAD.

finally maintain condition record by using VK11, for SALES TAX CONDITION TYPES with TAX CODES combination

balajia

Edited by: balaji timmampalli achari on Dec 20, 2010 6:58 PM