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 Tax Calculation via Jurisdiction Code

Purpose

Integration of the calculation (based on location) of taxes in the Real Estate Management component.

Taxes can be calculated on a local level and not just on a national level as is the case in the USA or Canada

This extension is based on the financial accounting component where the location is coded in the form of the jurisdiction code for the purposes of tax calculation. In the jurisdiction codes the definition of the tax percentage rate can also be time dependent.

Note Note

You find additional information about the types of tax collection in the documentation for the Financial Accounting (FI) component: Types of tax collection .

End of the note.

You can assign jurisdiction codes to the following objects:

  • Real Estate Management objects (business entity, property, building, rental unit)

  • Lease-out

  • Management contract

Prerequisites

In the Financial Accounting Customizing , you implement the corresponding activities for the sales tax :

  • Internal tax accounting (in the SAP System):

    Manual maintenance of the percentage rates for each jurisdiction code or

  • External tax calculation:

    Management of percentage rates for each jurisdiction code via RFC (Remote Function Call) with external companies (Vertex, Taxware, Sabrix etc.).

Process Flow

  1. Set the method of tax accounting in the Financial Accounting Customizing

  2. Maintain the jurisdiction codes in the required master records in RE:

    Real Estate objects

    Lease-out

    Management contract

    Caution Caution

    The assignment of the codes is based on a hierarchical concept: If there is no jurisdiction code for an object (e.g. rental unit), the code of the superior object is used (e.g. the code of the building; if this is not available the business entity is used)

    End of the caution.

    You can set a jurisdiction code for each condition type, if required.

    Caution Caution

    If this code is not entered, the rental unit or the superior object is used for the calculating the code.

    End of the caution.

    You can maintain two codes for each fee type for management contracts:

    • One for posting to customer accounts

    • One for posting to vendor accounts in the object company code.

      Caution Caution

      Pay attention to the F1 Help for the indicator NFA of the fee type.

      End of the caution.

Result

The taxes are calculated according to the percentage rates per jurisdiction code for every commercial operation that involves taxes.