Difference between TAX CODE and TAX JURISIDICTION CODE

[Former Member]

Hi,

Can someone explain me the difference between TAX CODE and TAX JURISDICTION CODE?

Both are derived based on the delivery address in the PO right?

[Former Member · Accepted solution]

Tax jurisdiction codes are required only in US and Canada. Tax codes are normally used to determine the Tax rates.

Jurisdiction for Tax Calculation - Tax Jurisdiction Code

The tax jurisdiction is used for determining the tax rates in the USA/CANADA. It defines to which tax authorities you must pay your taxes. It is always the city to which the goods are supplied.

The tax jurisdiction code is used in the United States for determining tax rates. The tax jurisdiction code defines the tax authority to which taxes must be paid. The determining location is the location to which the items are delivered.

Jurisdiction code is picked from the delivery address ( if your delivery address comes from Plant, then Jurisdiction code comes from the Plant business partner).

Tax codes are picked from customizing. You can configure them per Country/Product category combination in SPRO (Determine Tax Code for Country/Product Category)

You can make settings for Domestic or International purchases

Regards,

Sushil.

[Former Member · Accepted solution]

Thanks Sushil.

Is there any dependancy of tax jur code on tax code or vice-versa?

My understanding was both are independantly determined and together determine the tax rate for the PO items.

[Former Member · Accepted solution]

Hello,

As I said tax jurisdiction codes are normally used in USA & Canada to determine the tax rates. Taxation s/w like Vertex maintain up-to-date rates per jurisdiction code and as such are used for tax calculation.

For other countries you just use tax code based rates maintained in SAP/SRM.

Please refer to following notes for info on jurisdiction codes/ tax codes.

881086 - Country-specific tax calculation

1666129 - Error message TAX_TXJCD 105 occurs when trying to create a shopping cart

436760 - TAX. Specify a tax jurisdiction key

657146 - Enhancement for US tax calulation: Functions

Regards,

Sushil

[Former Member · Accepted solution]

Thanks Sushil Kumar.

My only question is:

Is there any dependancy between the two?

Our problem is that we have implemented a custom logic to populate the tax jur code and tax code in our system.The Tax code are correctly populated in the SRM and ECC PO but the "tax jur code" is not corretcly replicated to ECC PO as per the custom logic in BADI BBP_TAX_MAP_BADI.

Please advise.

[Former Member · Accepted solution]

Hello ,

What is the logic in BBP_TAX_MAP_BADI?

Are your deriving it from Delivery Plant address?

BBP_TAX_MAP_BADI is called only during tax calculation from SRM into ECC or external system.

I dont think the value from the above badi gets saved in the PO/SC.

So to transfer the jurisdiction code from SRM to ECC PO, You may have to implement the same logic in the above badi in the PO replication Badi as well.

What may also happen, in ECC PO, tax jurisdiction code may be derived from Accounting object or plant or delivery address. So refer to the notes above on how to overwrite it with your logic.

Let me know if this solves your issue.

Regards,

Sushil.

[Former Member · Accepted solution]

Yes,the tax jur code is derived from the delivery address.

The changes in the BADI are working only when the PO is changed i.e. When a cart is converted to a PO and PO is replicated to ECC for the first time,the changes for the tax jur code in the SRM badi are not taken.However if the PO is changed and then when it replicates to ECC,the tax jur code is populated as per the logic in the SRM badi.

[Former Member · Accepted solution]

'.....the changes for the tax jur code in the SRM badi are not taken....

This looks like a bug raise a SAP OSS.

Regards,

Sushil.