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tax determination

Former Member
0 Kudos

Hi

any one explain about "TAX DETERMINATION PROCESS". I need detailed documentaion also

Accepted Solutions (1)

Accepted Solutions (1)

Former Member
0 Kudos

Hello Raju,

<b>Tax Determination</b> –

The SAP system automatically determines and calculates taxes based on -

Country of the delivering plant + Country of the Ship-to-Party + Tax indicator of the Customer Master Record + Tax indicator of the Material Master Record.

It’s important to note that the condition types for taxes are country specific. Therefore one must assign the relevant tax condition types to the country key. The system will only regard those condition types as relevant for taxes that have taxes as the “condition class” in its control data.

When determining taxes, one should always maintain the data relevant to taxes in consultation with FI module.

Menu path: IMG – Sales & Distribution - Basic functions – taxes – define tax determination rules (OVK1). Here you assign the tax ‘condition type’ or ‘tax category’ to the relevant country key. In addition to this one needs to specify if more than one tax is required and in which order the system is to access the condition records.

For example, in case of countries like Canada, three types of taxes are imposed (GST, PST, PST-Que & Mar (Base+) on standard sales transaction; and therefore three condition types have to be maintained in the system. And when allocating the country key to the relevant condition type, an access sequence has to be mentioned for the country Canada to realize in which order the system is to access the condition records for that specific country.

For determining taxes one must ensure –

relevant tax categories are assigned to the country keys

condition types are maintained in the relevant pricing procedures

Associated tax records are created and maintained.

As some countries may have county or regionalized taxes such as Great Britain and even tax based at city level like in the case of US, it is possible to state specific regions, counties or cities within a country code. This is maintained at - Menu path: IMG – Sales & Distribution - Basic functions – taxes – define regional codes.

The next step is to assign the delivering plant to the relevant country, region and/or city code for tax purposes. This can be done at IMG – Sales & Distribution - Basic functions – taxes – assign delivering plants for tax determination.

The last and final step in this tax determination process is creation of tax indicators in the customer and material master records. Menu path: IMG – Sales & Distribution - Basic functions – taxes – define tax relevancy of master records (OVK3).

Here you specify if a customer or a material is liable for taxes or not. One can then assign a relevant indicators such as 1- liable for tax, 2- concession tax, 3- tax exempt in case of customers and 1- no tax, 2- half tax, 3- full tax in case of materials. New indicators can be created if necessary.

These indicators are maintained in billing document view of CMR and sales org. 1 view of MMR.

<b>Reward if helps</b>

Regards

Sai

Answers (3)

Answers (3)

Former Member
0 Kudos

Hi Raju,

Tax codes are first of all confihured in transaction FTXP in financial accounting.

Here you will create taxes for a particular country and the tax codes.You have to declare percentages out here.

Once you are done with this,you have to goto transaction VK11 and just put condition type MWST ,for this you will find three combinations,just select domestic taxes if you are maintaining for a particular country.

Now the tax values which you have put in ur customer master and material master and the ones maintained in SAP will be integrated.

Now when you will select your customer and material in the sales order ,your tax values will be picked automatically .

Reward points if it helps.

Regards

Karan

Former Member
0 Kudos

hi,

http://www.sap-img.com/sd009.htm

check this link it helps u

with regards

Rajesh

Former Member
0 Kudos

Hi,

Tax is determined by the followinf settings

1. There are various standard Condition types mentioned in the procedure.

2. You need to define tax codes through FTXP

3. In UTXj, maintain the condition records for the sending country/receiving country and then assign the tax code.

4. Tha tax code will carry the % value to be calculate for ex: 12%

Reward if ti helped!

Chandru