Define Tax Codes for Sales and Purchases 

Use

In this activity you define the allowable combination of tax codes and tax types used in calculation procedure TAXUSJ.

Procedure

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.

You can also use transaction FTXP to view table T007A.

When changing the tax codes, do not use SM31 because links to other tables are not maintained. Follow the menu path above or use transaction FTXP. Only display mode should be used for transaction SM31.

To create tax codes, enter the following data:

  1. Enter new tax code and description.
  2. Enter tax type: A (Output tax), V (Input tax)
  3. Select Check to activate error message when calculated tax amounts differ from entered tax amounts. Deselect to activate warning message.
  4. Deselect EC Code and Target tax code. These fields are not used in US jurisdictional taxes.
  5. On the next screen, enter a percentage for each jurisdiction level. The total percentage for all three levels requires three entries which are added together when applied.

Example of new tax code:

Tax code

J9

Description

A/P Sales Tax - Special NJ tax status

Tax type

V

Check

Selected

EC Code

Deselected

Target tax code

Deselected

See also:

Define Tax Codes for Sales and Purchases

Tax Code