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Define Tax Codes for Sales and Purchases

You have to define a separate tax on sales/purchases code for each country in which one of your company codes is located.
Each code contains one or more tax rates for the different tax types.

If you have to report tax-exempt or non-taxable sales to the tax authorities, you need to define a tax rate with the value 0.

Note

Do not delete or change any taxes on sales/purchases codes and their definitions as long as items with these codes exist in the system.
Otherwise, the R/3 System displays the tax amounts with incorrect tax rates in the corresponding reports and determines incorrect amounts during a tax adjustment for payment transactions.

Standard settings

SAP supplies a tax calculation procedure for each country. The procedure comprises a list of all common tax types with rules for tax calculation. In addition, example tax codes are defined for some countries.

Activities

1. Check the standard tax codes for your country. Add further tax codes, if necessary.
2. Ensure that tax accounts are defined for the automatic posting of taxes.

Notes on transporting tax codes

When tax codes are transported, only the tax rates of the tax codes are transported.

The transport of tax codes between systems or clients is carried out in two steps:

1. step:
Export of tax codes from the source system or source client

2. step:
Import of tax codes into the target system or target client

Export

1. In Customizing for Financial Accounting Global Settings in the source system or client, select Tax on Sales/Purchases -> Calculation -> Define Tax Codes for Sales and Purchases .
1. Select Tax code -> Transport -> Export.
2. Assign the export to the corresponding transport order, and note the order number.
3. Select and save the tax codes to be transported.
4. Make sure that the tax codes selected are marked with the transport number in table T007V.
To check the table, from the R/3 initial screen, select Tools -> ABAP Workbench -> Overview -> Data Browser .
Enter the table name. The tax codes are in field MWSKZ and the tax jurisdiction codes are in fields TXJCD.
5. Carry out the transport into the target system.
To do this, from the R/3 initial screen, select Tools -> ABAP Workbench -> Overview -> Workbench Organizer -> Environment -> Customizing Organizer.

Import

1. Make sure that the tax codes to be transported are selected in table T007V in the target system or target client.
2. In Customizing for Financial Accounting Global Setting in the source system or client, select Tax on Sales/Purchases -> Calculation -> Define Tax Codes for Sales and Purchases .
1. Create the tax codes that do not already exist in the target system.
Create them complete, but without tax percentage rates.
If you set internal systems in company codes in the USA or Canada, the corresponding tax jurisdiction codes should also exist. You can make the settings for these in Customizing for Financial Accounting Global Settings under Tax on Sales/Purchases -> Basic Settings -> Define Tax Jurisdiction Codes.
2. Select Tax code -> Transport -> Import.
3. Check the proposed values for the transport order and country.
4. Carry out the import.