SAP SD Tax configuration -Output Taxes

The configuration/master data settings relating to taxes are as follows:-

Configurations for Output Taxes in SAP

• Check Calculation Procedure

•          Create a Tax Procedure

• Assign Country to Calculation Procedure

•          Assign Tax Procedure to the Country

• Taxable indicator for Customer & Material

•          Create Taxable indicators for Customers &  Materials like Full Tax, Zero Tax, Concessional Tax

• Define Tax Determination Rules

•          Create Rules for determining the Taxes

• Tax Codes

•          Create Tax codes for various types of Tax % or Amounts

• SD Pricing Procedure

•          Create Sales Pricing procedure which contains the Tax Condition Types

• Account keys for Taxes and G/L account codes

•          Assign Account Keys to the Tax Condition Types

•          Assign GL Accounts to Account Keys

Master Data for Output Taxes in SAP

The Master Data pertaining to taxes are as follows:-

• Customer and Material Master should have a taxable indicator

•          Customer indicator is “Taxable” or “Exempt”.

Configurations steps as below 

1.Check Calculation Procedure

IMG>>Financial Accountin>> Financial Accounting Global Settings>>Tax on Sales/Purchases>>Basic Settings>> Check Calculation Procedure

TAXIN is the tax procedure in India

2.Assign Country to Calculation Procedure

IMG à Financial Accountingà Financial Accounting Global SettingsàTax on Sales/Purchasesà Basic Settingsà Check Calculation Procedure

Assign tax procedure as below

3.Taxable indicator for Customer & Material

IMG à Sales and Distributionà Basic Functionsà TaxesàDefine Tax Relevancy Of Master Records

Here we define taxable indicator for customer & material

Define tax relevancy indicator for Customer such as 0 value can be configured for Tax Exempt and 1 value for Liable for Tax

Same as material ,Define tax relevancy indicator for Material

4 Define Tax Determination Rules

IMGà Sales and Distributionà Basic Functionsà Taxesà Define Tax Determination Rules 

Tcode:OVK1

Define tax determination rule 

5.Tax Codes

IMGà Financial Accountingà Financial Accounting Global Settingsà Tax on Sales/Purchasesà Calculationà Define Tax Codes for Sales and Purchases 

Tcode:FTXP

Define tax code for Sales & Purchased 

6.SD Pricing Procedure

IMGà Sales and Distributionà Basic Functionsà Pricingà Pricing Controlà Define And Assign Pricing Procedures 

Tcode:V/08

Define & Assign priceing procedure

The MWS account key for the MWST condition type indicates that the tax will hit a particular G/L account code 

7.Account keys for Taxes and G/L account codes

In FTXP transaction code on entering the country and tax code,keep the cursor on output tax MWS and click on Tax accounts tab,enter the chart of accounts as shown in the below snapshot:-

8.Master Data Maintenance 

Customer and Material Master should have a taxable indicator

VAT registration number for European customers.

   

Jurisdiction code for U.S. customers.

Tax condition records

Maintain Condition records  

Tcode -VK11

U.S.A.:- 

In case of U.S., the taxes are derived from the tax code. 

e.g. In a sales order ,if we consider the condition types at item level, we will observe JR1 condition type having tax rate as 4%.

Tips for Configuration 

If Tax is not getting determined, then we can check the following points :-

• The country and region should be maintained for the Customer 
• Customer Master for taxable indicator
• Material Master for taxable indicator
• Check if tax procedure has been defined
• Check if tax procedure has been assigned to the country
• Check if the account key exists in pricing procedure for the respective tax condition type
• Check if the G/L account exists for Tax account key

Following are some of the tables that can be referred to:-

• Customer Master – KNA1,KNVV 
• Material Master – MVKE 
• Pricing Conditions – KONV 
• Tax Codes - T007S , T007V for percentage of tax code.

▪