Customizing for Non-Jurisdiction Method 

Purpose

In this process, you configure the system to calculate sales and use tax without using tax jurisdiction codes.

Process Flow

...

      1.      Assign the calculation procedure TAXUS to the country US.

To assign TAXUS to US, in Customizing for Financial Accounting, choose Financial Accounting Global Settings ® Tax on Sales/Purchases ® Basic Settings ® Assign Country to Calculation Procedure. You can also access this activity in Customizing for General Settings by choosing Set countries ®Define countries.

      2.      Create the tax rates according by country and tax code.

To define the tax codes, in Customizing for Financial Accounting, choose Financial Accounting Global Settings ® Tax on Sales/Purchases ® Calculation ®Define Tax Codes for Sales and Purchases.

      3.      Verify tax by country configuration and that US is assigned to tax categories UTX1, UTX2, UTX3, and UTX4.

To check the tax determination rules, in Customizing for Sales and Distribution, choose Sales ® Pricing ® Taxes ®Define Tax Determination Rules.You can also use transaction OVK1 to maintain table TSTL.

      4.      Verify customer tax category by checking that UTX1, UTX2, UTX3, and UTX4 are assigned tax classifications (1 for taxable and 0 for exempt).

To check the tax classification in the customer and material master records, in Customizing for Sales and Distribution, choose Sales ®Pricing ® Taxes ®Define Tax Relevancy of Master Records. Choose Customer Taxes.

      5.      Verify customer tax category by checking that UTX1, UTX2, UTX3, and UTX4 are assigned tax classifications (1 for taxable and 0 for exempt).

To check the tax classification in the customer and material master records, in Customizing for Sales and Distribution, choose Sales ®Pricing ® Taxes ®Define Tax Relevancy of Master Records. Choose Material Taxes.