Configuring Material Master Data (MM) 
Configuring Material Master Data (MM)
Use
You must define the possible tax classifications for the tax category that appear in the material master data on the purchasing screen.
The A/P material tax classification indicator is used as a key to automatically determine the tax code within purchasing. Multiple tax classifications may need to be set up for special tax rules and regulations based on material. These tax classification indicators are user-defined and point to user-defined tax codes.
Procedure
In Customizing for Materials Management, choose Purchasing
® Taxes ® Set Tax Indicator for Material. You can also use transaction OMKK (Table TMKM1).
For example, you can configure the following:
Tax classification |
Description |
Tax code |
0 |
Exempt material/service |
I0 |
1 |
Standard product |
I1 |
2 |
Service |
I2 |
3 |
Rental/lease |
I3 |
4 |
A/P consumer use tax |
U1 |
5 |
Taxware product code 52000 for insurance |
I4 |
6 |
User-defined product code of 9937299 |
I5 |