basic sap tax overview

7/25/2019 Basic SAP Tax Overview

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Generated by Jive on 2016-01-18+01:00

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Basic SAP Tax Overview

Purpose

I would like to provide a document that outlines the basics of SAP tax configuration and provides a couple of

examples of how tax code could be determined in SD and MM.Overview

SAP provides the majority of the tax configuration out of the box by country There are three SAP areas that work together to determine taxes FI,MM, and SD

FI Base configuration for tax procedures, rates and accounts

SD Configuration/master data to determine output tax code

MM Configuration/master data to determine input tax code

Master data such as customer, vendor, and material, as well as transactional data like POs and SalesOrders are key to determining the correct tax

Rates can be maintained in SAP or SAP can call an external system for them (this document withfocus on rates maintained in SAP)

FI Tax Basics

Tax configuration is done by country All company codes in the country share those settings Two Main Components:

Tax Calculation Procedure Provide the method of calculation normally use SAP

standard

Tax Codes Provide the rates

Tax Procedure

These are provided by SAP for each country General recommendation is to use

delivered logic

Tax Procedure, related conditions, and access sequences can be viewed in transaction SPRO atthe path Financial Accounting Global Settings>Tax on sales/Purchases>Basic Settings>CheckCalculation Procedure

Tax Procedure Example

Steps define calculation, conditions, and account assignments


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Condition Type Example

Condition record defines access sequence, and other characteristics about the condition

Access Sequence Example

Access Sequence defines field required to access a condition For example to find a condition for the entry below the system will use Country, Tax Code, and Tax

Jurisdiction


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Configuration - Assign Tax Procedure to Country

Tax Procedures are assigned to countries in transaction OBBG


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Tax Jurisdictions

Represent government authorities to which taxes need to be paid SAP allows up to 4 levels tax jurisdictions representing state, country, city, and others

Configuration - Jurisdiction Code Structure Tax Jurisdiction structure must be defined in transaction OBCO

Configuration - Maintain Jurisdiction Codes

Jurisdiction codes are maintained manually in transaction OBCP for tax procedures that do not usean external system


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Tax Codes

Tax Codes are maintained by country and jurisdiction code They define the rate that is used in calculation They are maintained in transaction FTXP Dont be confused on the name, this transaction can create,maintain, and display tax codes
http://scn.sap.com/servlet/JiveServlet/showImage/102-64527-1-721375/Jurisdiction+Codes.jpg


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Tax Code - Properties

The properties of the tax code identify its code, name, type (input vs output) and other informationabout it

Tax Code - Tax Rates

In the tax rate screen you enter the appropriate tax rates You can also see the account assignment key and the conditions that are used to calculate a value in

the follow on transactions such as SD invoice
http://scn.sap.com/servlet/JiveServlet/showImage/102-64527-1-721382/Tax+Code.jpg


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Tax Account Determination

Accounts are assigned in transaction OB40 You can also see the account assignment key and the conditions that are used to calculate a value in

the follow on transactions such as SD invoice


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Tax Code Determination

At the end of the day the tax is determined based on the tax code and the tax procedure on the AP or

SD invoice SAP multiple ways to determine the tax code, condition tables, master data, programs, manual entry,

etc. Method can be different by situation This document shows an example of how a tax code could be determined for an SD invoice (output

tax) and SRM Pos/invoices (input tax)


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basic sap tax overview

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