Tax codes are used to:
You define a tax code by entering a two-digit code to represent a tax percentage rate. See alsoTax Rates. In addition, the following technical specifications (characteristics) are required:
" " = Not EU-relevant
1 = goods delivery within EU, display in EC sales list
2 = services within the EU
3 = subcontracting within the EU
9 = acquisition tax
The system defaults tax types when you define a tax code. These tax types are the taxes that are relevant to your country or group of countries.
The tax types are defined in the system as country-specific and they determine how the tax is calculated and posted. The system determines the tax types by means of the country key that you specify when you define a tax code. For more information on the tax type, seeSpecifications for the Tax Type.
For information on how to proceed if you need a tax code for tax-exempt sales, seeTax Codes for Tax-Exempt Sales.
For information on how to define tax codes, see the Implementation Guide for Financial Accounting under the documentation for the activity Define Tax Codes for Sales and Purchases. See alsoConfiguring the System Using the Implementation Guide.