HOW TAX CODE IS DEFINED AND ASSIGNED IN SD?

[Former Member]

Hi Gurus,

Where do we assign the Tax codes to the Customer.

How the System picks up the exact tax code for the particular Customer, Where do we configure this can u give step by step detials with screen shots and how it is linked to material master?

Thanks,

Debesh tripathy

[Former Member · Accepted solution]

Hi

No Tax codes are assigned to the customer..

Elabrate your question..

Tax codes are normally assigned to the country code in FI/CO..

In SD, The Tax condition is maintained in VK11.. condition record is created for the specific combination not by value but as TAX codes... then the Tax code picks the value from FI/CO

Muthu

[Former Member]

Hi,

You should assign tax codes for the customer in customer master record of sales area data--

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Billing tab--

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Taxes.

in case of excise duties you can assign excise is applicable or not by using T.code J1ID -

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select the radio button of customer excise Details---Excise indicator of customer--

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Ex:1.100% tax 2..50% tax..etc.

[Former Member]

hi,

Tax Determination:

OBQ1 - Maintain/Create Condition Type

OBQ3 - Tax Pricing Procedures

OBQ2 - Tax Access Sequences

OBBG - Assign Tax Country to calculation procedure .

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 maintain 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.

How can we maintain the Tax Code (Tax code - which we maintain in MWST Condtion 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 parameteres, whether is fully liable for tax or expemted (in case of Defence Customer)

2) There are few parameteres which we apply tax condition. Whether customer is tax liable? Whether material is tax exempted?

For example, if you are selling a 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

Defence organisations) put the Tax Indicator (at CMR as 0) or 1 in case fully tax liable.

3) Now, at VK11 you need to mainatain your pricning conditions with all the combinations like:

1 0

1 1

0 1

0 0

4) While maintaining your Material Master Records or Cusotmer Master Records, you must identify, which are tax liable and which are tax exempeted.

5) In anycase, as a SAP standard Best Practises, 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 Defintions, 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 Cusotmer 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.

[Former Member]

Hi Debesh,

Simply "Tax code" is considered by the system during account posting.

you can maintain it in FI (FTXP)

ITs delivered with standared country wise.for detailes follow the following path .

IMG -Financial Accounting - Financial Accounting Global settings -Tax on sls and purchase - calculation -Define tax code for sales and purchase -Define tax code for exemted sales.(take help from FI guys)

WE assigned respective Tax code in SD at the time of Condition maintainance.

karnesh

[Lakshmipathi]

Dear Debesh

First maintain the tax conditions in <b>FTXP</b> (FI's responsibility). In SD, you have to maintain in <b>UTXJ</b> and also in Pricing Procedure, you have to include those conditions.

In SD, whatever tax code you are maintaining in UTXJ, that will fetch into your sale order.

Thanks

G. Lakshmipathi

[Former Member]

van u tell me step by speps or screen shots so that i ll do it using it?plz its required for me?debeshtripathy@gmail.com

Regrads,

Debesh