You must have setup the respective tables before entering data in the record.
For more information, see Tax section of the Implementation Guide (IMG).

To setup a record for Income Tax infotype (0353):

1. Choose Human resources à Personnel Management à Administration à Maintain
   master data. The Maintain HR Master data screen appears.
2. Enter the employee’s personnel number. Use Matchcode to find a number.
3. Select Income Tax infotype (0353) by entering the name or number in the Infotype field.
4. Choose Create. The Income Tax (TW) screen appears.
5. Enter the required rule in the Special Rules field. Use the down arrow to select a rule, if necessary.
6. Enter the Tax category and Tax dep. Number.These fields are required if the value in the Special Rules field is 0.
7. Save.

A tax record is created for the employee that enables the payroll to calculate the taxes.