The section code is an reporting unit of the R/3 system. It represents the reporting unit in a company of the withholding tax in Korea. The section code can be described as a combination of a Tax Office and a Local Tax Office. The reporting and payment of withholding tax is divided into two parts. Each part has to be reported either to the Tax Office or to the Local Tax Office. The part which has to reported to the Local Tax Office is the local tax part e.g. the inhabitant tax.

It is allowed to report the withholding tax by units or sections of a company which has the ability to do Accounting. Usually these sections are characterized by units who has got a VAT-registration number (10 digits). One section code can be, of course, a business place because the business place of a Korean company code has a VAT-number.

In the R/3 system, the section code is a sub-structure of a company code which can be optionally linked to a business place. The link to the business place is optional. In the reality there can be no relation between a business place and a section code. But if a business place is reporting the withholding tax which is quite often the case then the section code master data should contain the business place as an attribute. This depends on how your company is reporting the withholding tax. The section code master data can be created in the IMG. Enter your company code in the pop-up window. Then click on new entries and enter the section code (max. 4 chars), the text, the business place (optional, see above), the Tax Office and the Local Tax Office.