Tax Calculation in MM and FI (SAP Library

Tax Calculation in MM and FI

Purpose

For MM and FI transactions, tax calculation uses a tax calculation procedure instead of a pricing procedure. The tax calculation procedure applies the condition technique.

Process Flow

The main aspects of tax calculation procedures include:

Every condition type in a tax calculation procedure has the same access sequence MWST.

Access sequence MWST has 2 parameters: country and tax code.

The tax condition records for each condition type is created through the FI condition record maintenance.

The FI tax condition records are based on the tax code and are created in central configuration for tax code condition records. The tax codes are used in A/R sales and use tax, A/P sales tax and A/P self-assessment/use tax.

For MM and FI document transactions, the company code’s country and the tax code entered forms the FI tax condition records for the country tax procedure.

For MM, if the tax code is not entered manually, an automatic tax code determination is necessary. Configuration set up for automatic tax code determination in MM.

The tax calculation procedure also determines the G/L (tax liability) accounts to which the tax amounts are to be posted to accounting. A correct configuration set up is required for automatic G/L account determination.

The standard tax calculation procedure delivered by SAP for tax calculation using external tax system is TAXUSX.

The tax calculation procedure TAXUSX is configured to call the tax interface system through the Condition Value Formulas: 300 - 306. The tax interface system passes tax relevant information to the external tax system such as tax code properties, ship-to and ship-from jurisdiction codes, and taxable amount and returns the tax amounts and tax rates from the external tax system back to the transaction.