Specify Structure for Tax Jurisdiction Code (SAP Library

Specify Structure for Tax Jurisdiction Code

Use

In Customizing, the activity Specify Structure for Tax Jurisdiction Code is required by the SAP tax calculation engine. SAP tax calculation engine requires information on how a jurisdiction code is structured as well as if tax should be calculated/posted by line item.

Although this has no meaning for external tax calculation, it influences the relevant input data passed to the tax interface system for tax calculation and postings.

Procedure

In Customizing for Financial Accounting, choose Financial Accounting Global Settings ® Tax on Sales/Purchases ® Basic Settings ® Specify Structure for Tax Jurisdiction Code. You can also use transaction OBCO (Table TTXD).

Add entry TAXUSX.

For Taxware, enter 2,5,2 or for Vertex, enter 2,3,4,1.

Select TxIn which indicates taxes determined by line item

When this indicator is set, taxes are calculated on a line-by-line basis within the MM and FI application. This is necessary in order to pass on material specific data such as material number and quantity as well as to make sure that the taxes can be reported on a line item basis. A cumulative tax amount based on the combination of tax code and jurisdiction does not apply here.

Note

If the taxes are entered manually in the transaction, then calculate tax is deactivated and the check is performed on a cumulative basis regardless of the determine taxes by line item indicator.