on 07-09-2007 12:34 PM
Hello All,
Can any one please explain me how tax is determines and what all the settings we need to do how tax determination procedure works where can i see tax determination procedure?what is the rule for it.
Thanks in advance
Regards,
Rani
Hi Rani,
If you do not have authorization for Transaction code FTXP, pl. get in touch with your Fi/Co colleague who would be having this authorization.
Tax codes are created by Fi/Co consultants.
Reward points, if this helps.
Thanks,
Vijay Sateesh
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Hello All,
Actually i have a condition type called MSWX when i try to created the VK11 condition record for this by entering Cust Tax Classification 1 Material Tax classification 1 and Access sequence is Domestic
It gives me error saying that Tax code in procedure TAXSK is invalid.
please help me
Regards,
Rani
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hi refer below reward if helps
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 maintaining 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 Condition 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 parameters, whether is fully liable for tax or exempted (in case of Defense Customer)
2) There are few parameters which we apply tax condition. Whether customer is tax liable? Whether material is tax exempted?
For example, if you are selling 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
Defense organizations) put the Tax Indicator (at CMR as 0) or 1 in case fully tax liable.
3) Now, at VK11 you need to maintain your pricing conditions with all the combinations like:
1 0
1 1
0 1
0 0
4) While maintaining your Material Master Records or Customer Master Records, you must identify, which are tax liable and which are tax exempted.
5) In any case, as a SAP standard Best Practices, 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 Definitions, 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 Customer 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.
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Hi,
Define Tax Determination Rules
In this menu option, you define the rules for tax calculation.
The SAP System determines the taxes automatically within pricing.
Proceed as follows:
You have to define a condition type for each tax type (for example, taxes on sales and purchases, output tax).
You have to define access sequences and condition tables for this condition type.
You have to include the tax condition type in the pricing procedures in which the taxes should be taken into account.
For the tax conditions, you have to create condition records in which the respective tax record is stored.
Default settings
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).
Actions
1. Check to what extent you can use the defaults contained in the standard SAP R/3 System.
2. Define the condition types for tax calculation. Define the access sequences and check the condition tables. Include the tax condition types in the pricing procedures involved.
You carry out these actions in the step for pricing control.
"Pricing control".
3. Specify the valid tax types, that is, the tax condition types for every country. If more than one tax type can be defined for a country, you define the sequence of their use here.
Reward points if useful
Regards,
Amrish Purohit
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