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Why do we maintain A0 & V0 Tax Code in OBCL ?

Hello All Experts,

Why do we maintain the A0 & V0 in OBCL ( Maintain Tax Code for Non-Taxable Transactions ).

Why do we need Tax Codes to be enter or maintained if it is clearly saying Non-Taxable transaction ?

Can anybody explain this... I have gone through many more threads I didn't find any explanative thread regarding the same.

I request the forum experts to guide on this.

Regards,

Sharu.....

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Former Member
replied

Hi - Let me explain it with a example. Say that you have a revenue account which is relevant to tax. In the GL master of the revenue account you would have maintained a Tax category. In this case any line item you post to this account should have tax code associated with it.

Now you have two customer one is a private party and another is a government agency (or any tax exempt customer). You will be posting the revenue of both the customers to the same account. In this case to successfully post the line item for the tax exempt customer you need to have these tax codes setup.

Moreover you have a jurisdiction code too in OBCL. This is required for if your tax procedure is jurisdiction  based.

Hope this helps!

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