Tax Interface

Table of contents

Taxes 3.0 SAP Tax Interface Configuration Guide

Table of contentsIntroduction

Overviewiii

Central Configuration

0.1Basic Data Providedvi

0.2Basic Concepts: SDvi

0.3Basic Concepts: MM/FIvii

1.0Communication Configuration

1.1Getting Started1

1.2SAP and Tax Software Package reside on the same server3

1.3SAP and Tax Software Package reside on different servers4

1.4Testing the connection5

1.5Assign external tax system to logical destination8

2.0Test Utilities

2.1Test Jurisdiction Determination..........................................................10

2.2Test Tax Calculation14

3.0Central Configuration

3.1Defining the tax jurisdiction code structure...21

3.2Defining a tax procedure to a country24

4.0Tax Interface Configuration

4.1Activate external tax calculation27

4.2Activate external updating29

5.0Customizing Master Data Tax Indicators (SD)

5.1Tax by country configuration (SD)31

5.2Customer master configuration (SD)33

5.3Material master configuration (SD)37

6.0Customizing Master Data Tax Indicators (MM)

6.1Material master configuration (MM)41

6.2Define tax classification indicators for plant (MM)43

6.3Assign tax classification indicators to plant (MM)44

6.4Define tax classification indicators for account assignment (MM)45

6.4Assign tax classification indicators for account assignments (MM)46

7.0Master Data Maintenance (SD)

7.1Customer master maintenance (SD)48

7.2Material master maintenance (SD)56

7.3Plant maintenance (SD)58

8.0Master Data Maintenance (MM)

8.1Assignment of jurisdiction to plant (MM)63

8.2Assignment of jurisdiction to cost center (MM)64

8.3Assignment of jurisdiction to vendor master (MM)65

8.4Assignment of A/P tax classification indicator to material master (MM)68

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9.0Condition records

9.1FI condition records70

9.1.1Tax code condition record70

9.1.2Tax code properties71

9.1.3Tax code condition record & properties maintenance (A/P)73

9.1.4Mapping Product Code (A/P)83

9.1.5 Tax code condition Record & Properties Maintenance (A/R) 84

9.1.6Mapping Product Code (A/R)89

9.2SD condition records90

9.3MM condition records94

9.3.1Assign access sequence ton condition type NAVS94

9.3.2Creating MM tax condition records95

Appendix A: Tax Interface Modification Upgrading to 3.0 Standard Tax Interface99

Appendix B:General Ledger Accounts102

Appendix C:Calculate Taxes on Net Amount107

C.1Based on User ID108

C.2Based on Company Code/Region110

Appendix D:Calculate Discount On Net Base Amount113

Appendix E:Update External Tax System Files114

E.1Updating SAP tables TTXI and TTXY115

E.2Update utility programs117

Appendix F:Maintain condition elements (FI)119

F.1Condition types (FI)120

F.2Access sequences (FI)134

F.3Tax Procedure (FI)137

Appendix G:Control Data for Pricing (SD)142

G.1Condition types (SD)143

G.2Access sequence (SD)148

G.3Pricing Procedures (SD)151

G.4Relating Document Types to Procedures (SD)154

Appendix H:Verify Account Processing Key Setup

H.1Check and change settings for tax processing155

H.2Define tax accounts159

H.3General Ledger Maintenance163

Appendix I:Tax Only Adjustments165

Appendix J:User-Exit169

Appendix K:Freight

179

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Document Overview

Introduction and General Information:As of 3.0 SAP offers three standard methods to compute US and Canadian sales and use tax.

1. Standard SAP Sales & Use Tax Interface to 3rd party tax packages

(currently Taxware International and Vertex).

2. Standard SAP Jurisdictional Sales & Use Taxes

3. Standard SAP Non-Jurisdictional Sales & Use Taxes

The following document explains in detail the configuration steps which must be performed within SAP release 3.0C and above when interfacing to an external tax system. This document is intended for the use of all SAP consultants, pre-sales, customers and third party consultants who will need to know how to configure SAP to calculate taxes using the external tax interface.

This document does not explain how to configure the two other SAP tax methods listed above. It is also not intended for SAP customers who are installing or who have installed the 2.2 tax interface advance modification. A separate configuration document exists for this (see 2.2 tax interface configuration guide located in Lotus Notes: Support/Professional Services/FI/Taxes ). This document is solely intended for SAP release 3.0C and above.

Please note that due to changes from release to release, certain functionality and/or configuration steps may change. It is up to the customer to keep abreast of these changes.

Background

In SAPs R/3 2.2 release an advance modification of SAPs tax API (Application Programming Interface) was offered to provide our customers going live with 2.2 an alternative tax solution. In SAPs release 3.0B and above, SAPs tax API is delivered with the standard software.

Certification

In order for SAPs tax API to communicate with a third partys tax system, the third party must develop an API which can communicate with SAPs API. Once this has been

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completed, the communication connection is tested between SAPs system and the third party system. If the communication works correctly, then SAP will certify the third partys connection. Please note: SAPs 3.0 tax interface certification was performed on an HP UNIX operating system.

Third Party Software & API

SAP provides a tax API which is capable of passing all needed data to an external tax system to calculate taxes and determine tax jurisdictions, and then return these calculated results back to SAP. This occurs during master data address maintenance to retrieve the appropriate tax jurisdiction code, during order and invoice processing out of FI, MM, and SD, to retrieve tax amounts, and during the execution of the update utility program which updates the third partys software files with the appropriate tax information.

SAP does not deliver the certified partners software or API developed to communicate with SAPs API. This software must be purchased and delivered from one of our certified partners.

Prerequisites

In order for tax calculation to work utilizing an external tax package, the third party software package must be installed at the customer site. In addition to this, the appropriate version of SAPs certified tax partners API (Application Programming Interface) must also be installed at the customer site. Our current certified partners are Taxware International Inc. (formally AVP Systems) and Vertex Inc. Their APIs which communicate with SAP are TaxwareLink and TransLink respectively.

In addition to the above, communications between SAP and the external tax package must be established. Communications between SAP and the third party tax package is established using SAP RFC (Remote Function Calls). The communication setup configuration is explained in the following documents. Please note that although the configuration within SAP in setting up the RFC call may seem straight forward, difficulties in getting the communications to work during initial setup often arise. It is therefore recommended that the customer have an experienced Basis person to assist with this initial setup.

Important Note

SAP is under no obligation to install 3rd party packaged software, or their corresponding certified API. This is the full responsibility on the 3rd party software vendor. If during the installation of the third partys API, problems have been detected with SAPs RFC

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libraries, then these problems should be directed to and resolved by SAP.

SAP will assist our customers with communication setup and testing from within SAP as well as application configuration upon customer request. This will only be done after the third partys standard software, as well as their software needed to communicate with SAP has been properly installed and tested. Any problems our customers have with installing third party software should be directed to and resolved by the appropriate software vendor.

SAP is under no obligation to provide consulting, setup, or maintenance of a third party software package. If customers have post installation questions, problems, or maintenance issues which pertain specifically to the third partys software package, then these questions should be directed to and resolved by the appropriate software vendor.

SAP is also under no obligation to provide post implementation consulting for third party software packages.

User-Exits

SAP provides a customer user-exit to handle customer specific and partner specific functionality. Any ABAP code added to this user-exit to manipulate SAP functionality or pass unique values to the third party package is considered a customer modification and is not supported by SAP hotline. The most common user-exit examples related to taxes are provided within this document. If a customer would like assistance from SAP to define their specific tax requirements, establish resolutions to these requirements, and/or to provide ABAP programming logic to the user-exit, they should direct these issues to their SAP contact person. SAPs assistance and setup is considered consulting and will be billed to the customer accordingly.

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0.1Basic Data Provided:

When delivered, the system should be loaded with Tax Procedures TAXUSX along with all necessary condition types. If not, then the appendices and the configuration guide presented here should aid you to set it up.

0.2Basic Concepts: SD

SD requires that sales orders and invoices reflect the tax applicability of each item and compute the total tax due on each line item within the sales document. Appropriate tax amounts are determined for both orders and invoices based on the delivering country (origin), the region (state, province) of the ship-to address, the tax class of the ship-to partner, the tax class of the material being shipped, the posting date, and the jurisdiction of the customer and the plant. Taxes are calculated based on the ship-to partner destination, but other factors can influence the tax amount. The ship-from destination (plant), as well as the point of order acceptance, and the point of order origin (Taxware only). Please note that SAP defaults the ship-from jurisdiction maintained on the plant as the point of order acceptance, and defaults the ship-to jurisdiction maintained on the customer as the point of order origin. Order acceptance jurisdiction and order origin jurisdiction can be changed using the provided tax interface user-exit.

Jurisdiction codes are automatically retrieved from the external tax package during creation or change of a customer master record or a plant. This occurs after the address information has been entered on the master data.

SD uses the country, region (state, province), customer tax classification indicator, and material tax classification indicator to read the tax condition records. In pricing the sales order, the system exits the normal pricing upon recognizing a condition type 1 (UTXJ, as delivered). The tax condition records are then read using the country and tax code maintained in the pricing condition record. The tax procedure and the SD pricing procedure contain condition formulas (300 - 306) which invoke SAPs tax interface API. Once SAPs API is invoked, a data structure is filled with the necessary information needed by our partners tax package to calculate taxes. This data structure is then passed to our partners API via an RFC (remote function call). The partners API passes this data to its tax calculation package. The appropriate tax is calculated and returned back to the partners API., and then onto SAPs API. These tax amounts and rates are applied to the SD documents pricing at each of up to six levels of jurisdiction denoted by the Condition Types (e.g. XR1..XR6).

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0.3Basic Concepts: MM/FI:A/P

MM/FI provides that for each line of the purchase order (PO) created or invoice entered, the sales or use tax can be computed by the system. This means the system needs to know where taxes are being charged. A ship-to tax jurisdiction code must be maintained. This jurisdiction code can reside on the plant, cost center, asset master, internal order, or project (WBS). If no jurisdiction code is maintained on the asset, order, or project, then the jurisdiction code of the responsible cost center maintained on the asset, order, or project will default into the purchase order or invoice verification document at the at time of document creation. This jurisdiction code will be used as the ship-to tax destination. In addition to the ship-to destination (plant, cost center, etc.), taxability is also influenced by the ship-from destination. A jurisdiction code can be maintained within the vendor master record. This jurisdiction code will be used as the ship-from tax destination.

Jurisdiction codes are automatically retrieved from the external tax package during creation or change of a plant, cost center, or vendor master record. This occurs after the address information has been entered on the master data. For an asset, internal order, and project one may select PF4 (possible entries) on the jurisdiction code field, and return a list of valid jurisdictions from the external tax system to choose from.

MM & FI, use country and tax code to read the tax condition records. The tax procedure TAXUSX contains condition formulas (300 - 306, 311-316) which invoke the tax interface API. Once the API is invoked a data structure is filled with the necessary data needed by our partner tax packages to calculate taxes. This data structure is passed to our tax interface partners API via RFC (remote function call). The tax partner API passes this data to the tax calculation package, which in return passes the tax data back to the API. The tax partner API then passes this information back to SAPs API onward to MM/FI. Tax amounts and statistical rates apply to each of up to six levels of jurisdiction denoted by the Condition Types (e.g. XP1E..XP6E, XP1I..XP6I, XP1U..XP6U).

Each GL account and cost element has a tax category field with a variety of settings. Output is for SD/AR. Input is for MM/AP. Blank is for accounts not applicable like cash or accumulated depreciation accounts. Typical accounts designated as requiring output taxes include revenue accounts and trade receivables. Input taxes requires would be found on trade accounts payable and primary cost elements that are normally taxable (small tools, material consumed). In the USA, component inventory is not taxable but in Canada, it is usually partially taxable (GST).

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1.0Communication Configuration

1.1Getting Started

A RFC destination must be created which specifies the type of communication and the directory of the executable program.

IMG Path:Financial accounting>Finaancial accounting global

settings>Taxes on sales/purchases>Basic settings>External tax

calculation>Define physical destination

Transaction: SM59

The destination must be setup as a TCP/IP communication protocol.

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1.1Getting Started

The destination name is user defined. In the following examples the destination name for Taxware is AVP, and the destination name for Vertex is VERTEX.

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1.2SAP and Tax Software Package reside on the same server

In the above example SAP and the external tax package reside on the same server. Notice that in this case Application Server should be selected as the program location.

In the field Program, the external tax packages executable or shell script program along with the directory path in which it was installed, must be specified.

Page 31.3SAP and Tax Software Package reside on different servers

In the above example, SAP and the external tax package reside on different servers. This would be an explicit communication setup. Explicit host should be selected as the program location. For explicit communication setups, the host name of the server where the tax package software resides must be defined within the field Target machine.

In the field Program, the external tax packages executable or shell script program along with the directory path in which it was installed, must be specified.

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1.3Testing the connection

In order to test the connection between SAP and the external tax package, depress the Test connection button in the upper left hand corner of the screen.

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If a screen similar to the one above appears, the communication is working correctly.

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If a screen similar to the one listed above appears, then there is something wrong with the communication setup.

If the above occurs, check to see:

1. The connection type is TCP/IP.

2. Program location and host name are correctly specified.

3. The directory path and the name of the executable program are correct.

4. Third party tax package has been installed correctly and is the correct

version .

5. Third partys API for SAP tax interface is installed correctly and is the

correct version.

6. SAP RFC libraries are correct version.

7. The correct permissions are set for user account.

8. Check user has read/write authority.

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1.4Assign external tax system to logical destination.

IMG Path:Financial accounting>Financial accounting global settings>Tax

on sales/purchases>Basic settings>External tax calculation>

Define logical destination

Table: TTXC

Ex:

A = Taxware

V = Vertex

Event:

JUR = Jurisdiction determination

TAX = Tax calculation

UPD = Update tax package audit/register files

Page 81.4Assign external tax system to logical destination.

Function Module: RFC_DETERMINE_JURISDICTION = jurisdiction determination

RFC_CALCULATE_TAXES = tax calculation & update

RFC destination:Name of destination setup in SM59, i.e. AVP / VERTEX.

Please note that the RFC function modules listed above are delivered with SAP. Check to see if they exist via transaction SE37.

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2.0Test Utilities

2.1Test Jurisdiction Determination

Menu Path: Tools>ABAP/4 Workbench>Function Library>Test

Transaction:SE37

RFC Function Module: RFC_DETERMINE_JURISDICTION

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Specify the RFC destination in the field RFC target system. Please note that this must be entered using uppercase letters.

Double click on LOCATION_DATA located under Import Parameters. A pop-up window should appear in which you can enter test data.

Minimum data which must be entered for jurisdiction determination is region (state, province) and postal code (zipcode).

After entering the test data and the RFC destination go to

Function Module>Execute

Page 112.1Test Jurisdiction Determination

After executing the function module you should receive a screen similar to the one shown above.

To view the results double click on LOCATION_RESULTS under Tables. To view messages double click on LOCATION_ERR under Export parameters.

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The jurisdiction results will differ depending on the tax software package being used.

.

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2.2Test Tax Calculation

Menu Path: Tools>ABAP/4 Workbench>Function Library>Test

Transaction:SE37

RFC Function Module: RFC_CALCULATE_TAXES

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Specify the RFC destination in the field RFC target system. Please note that this must be entered using uppercase letters.

Double click on TAX_DATA located under Import Parameters. A pop-up window should appear in which you can enter test data.

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Minimum data which must be entered for tax calculation:

Taxware:Ship-to jurisdiction (TXJCD_ST)

Ship-from jurisdiction (TXJCD_SF)

Point of order acceptance jurisdiction (TXJCD_POA)

Point of order origin jurisdiction (TXJCD_POO)

Length of first jurisdiction level (TXJCD_L1)

Length of second jurisdiction level (TXJCD_L2)

Length of third jurisdiction level (TXJCD_L3)

Length of fourth jurisdiction level (TXJCD_L4)

Taxable amount (AMOUNT)

Vertex: Ship-to jurisdiction (TXJCD_ST)

Taxable amount (AMOUNT)

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When entering in taxable amount add two additional zeros to take into consideration two decimal places. For example 10000 is actually 100.00.

The quantity field has an implied 3 decimal places. When entering the quantity, three additional zeros must be added. For example 10000 is actually 10.000.

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Tax calculation results may vary depending upon external tax package being utilized.

After executing the function module you should receive a screen similar to the one shown above.

To view the results double click on TAX_RESULT under Export parameters. To view messages double click on TAX_ERR under Export parameters.

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3.0Central Configuration

3.1Defining the tax jurisdiction code structure

3.2Defining a tax procedure to a country

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IMG Path:Financial accounting>Financial accounting global

settings>Tax on sales/purchases>Basic Settings>

Specify structure for tax jurisdiction code

Transaction:OBCO

Table:

TTXD

Taxware tax structure

Add entry TAXUSX (enter Taxware = 2,5,2 or Vertex = 2,3,4,1).

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Indicator: Determine taxes by line item (Tx In)

When this indicator is set, taxes are calculated on a line-by-line basis. A cumulative tax amount based on tax code and jurisdiction would not apply here. Since multiple tax items can be created for each line item, and internal processing only allows for up to 999 line items, the maximum number of line items per document is, in effect, reduced, compared to the total number of lines allowed when line-by-line tax calculation is not activated.

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4.0Tax Interface Configuration

4.1Activate external tax calculation

4.2Activate external updating

Page 264.1Activate external tax calculation

IMG Path: Financial Accounting>Financial accounting global settings>

Tax on sales/purchases>Basic settings>External tax

calculation>Activate external tax calculation

Table view:V_TXD_E

Taxware

Page 274.1Activate external tax calculation

Vertex

Page 284.2Activate external updating

IMG Path: Financial Accounting>Financial accounting global

settings>Taxes on sales/purchases>Basic Settings>

External tax calculation>Activate external updating

Table: TRWCA

Setting this flag will cause tables TTXI and TTXY, header and item tax data respectively, to be updated with the information returned by the external tax system. Program RFYTXU00 reads against this table to update the external tax systems files with the appropriate data.

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5.0Customizing Master Data Tax Indicators (SD)

Here the setup necessary for the system to derive tax code from material and customer master file tax classifications will be explained. First the tax indicators need to be defined for the country. Then in the configuration of the customer and material master files. Finally the tax classifications can be entered in the master files themselves. These indicators will be used to automatically determine the tax code in SD via pricing condition records.

5.1Tax by country configuration (SD)

5.2Customer master configuration (SD)

5.3Material master configuration (SD)

Page 305.1Tax by country configuration (SD)

This configuration sets up the options for the customer master and material master. It is a check table for tax category and country relationship.

IMG Path: Sales and Distribution>Basic functions>Tax determination>

Define tax determination rules>Define tax types for each

country

Transaction:OVK1

Table:

TSTL

Tax category UTXJ must be maintained using a sequence of 1 for the U.S.

Page 315.1Tax by country configuration (SD)

Tax category CTXJ must be maintained using a sequence of 1 for Canada..

Note: Users may want to delete entries UTX2, CTX2, UTX3, CTX3 to suppress them

from display on the customer master taxes view.

Page 325.2Customer master configuration (SD)

This configuration defines the possible tax classifications for the tax category in the customer master on the billing screen.

IMG Path: Sales and Distribution>Basic functions>Tax

determination>Define tax relevancy of master

records>Customer taxes

Transaction:OVK3

Table:

TSKD

Here the user defined customer tax classification indicators are defined based upon tax category UTXJ for the U.S.

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Here the user defined customer tax classification indicators are defined based upon tax category CTXJ for Canada.

The customer tax classification indicator is used as a key in automatically determining the tax code within SD. If all tax exemption handling is done by the external tax system, then a special classification indicator for exemptions would not be needed.

SAPs tax exemption handling is beneficial in reducing system performance time because it reduces the amount of calls made to the external tax system. However, when utilizing this functionality, keep in mind that no detail updating is possible to the third party packages files. SAPs logic will check the data calculated during FI posting to what is

being recalculated during update to the external tax systems files. Since the tax calculation never occurred during FI posting because the call to the tax system was bypassed, update will fail with an error message indicating that the previously calculated data differs from the data which is being recalculated.

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The only way to pass data over to the tax system in this situation is to force it over in summary with no recalculation. If the external tax systems files are not being updated for reporting purposes than this is a non issue.

If all tax reporting is being handled within SAP, then it may be beneficial to handle tax exemptions within SAP.

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Menu Path:Logistics>Sales/distribution>Sales>Order/Inquiry/Quotation>

Create/Change

Transaction:VA01/VA02 Sales Order

VA11/VA12Sales Inquiry

VA21/VA22Sales Quotation

The customer tax classification indicator can be overwritten during sales order entry. Within sales order goto Header>Business Data, under Billing data select the green arrow for additional information, field name is Alt. tax classific. (see above)

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IMG Path: Sales and Distribution>Basic functions>Tax determination>

Define tax relevancy of master records>Material taxes

Transaction:OVK4

Table: TSKM

Here the user defined A/R material tax classification indicators are defined based upon tax category UTXJ for the U.S. and tax category CTXJ for Canada..

The A/R material tax classification indicator is used as a key to automatically determine the tax code within sales. Multiple tax classifications may need to be set up for special tax rules and regulations based on material. These tax classification indicators are user defined, and point to user defined tax codes maintained via transaction FTXP.

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In the above example tax classification 0 represents an exempt material or service which points to a tax code of say O0. Tax classification 1 represents a standard product which points to a tax code of say O1. Tax classification 2 represents a service which points to a tax code of say O2. Tax classification 3 represents a rental/lease which points to a tax

code of say O3. Tax classification 4 points to a tax code of say O4 which represents a Taxware product code 12000 for consulting services. Tax classification 5 points to a tax code of say O5 which represents a user defined product code of 9937299.

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Menu Path:Logistics>Sales/distribution>Sales>Order/Inquiry/Quotation>

Create/Change

Transaction:VA01/VA02 Sales Order

VA11/VA12Sales Inquiry

VA21/VA22Sales Quotation

The material tax classification indicator can be overwritten during sales order entry. Within sales order goto Item>Business Data, under Billing data select the green arrow for additional information, field name is Tax classification. (see above)

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6.0Customizing Master Data Tax Indicators (MM)

Here is the necessary setup for the system to automatically derive tax code from material, plant and account assignment for MM transactions. As with SD master data configuration, tax classification indicators must be maintained to automatically determine the tax codes.

When creating a purchase document the tax code will be automatically determined based on the configuration described below. The tax code can be overwritten within the purchase order (item details) and invoice verification document.

6.1Material master configuration (MM)

6.2Define tax classification indicators for plant (MM)

6.3Assign tax classification indicators to plant (MM)

6.4Define tax classification indicators for account assignment (MM)

6.5Assign tax classification indicators for account assignments (MM)

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IMG Path: Materials Management>Purchasing>Taxes>

Set tax indicator for material

Transaction:OMKK

Table:

TMKM1

Here the A/P material tax classification indicators are set.

The A/P material tax classification indicator is used as a key to automatically determine the tax code within purchasing. Multiple tax classifications may need to be set up for

special tax rules and regulations based on material. These tax classification indicators are user defined, and point to user defined tax codes maintained via transaction FTXP.

In the above example tax classification 0 represents an exempt material or service which points to a tax code of say I0. Tax classification 1 represents a standard product which points to a tax code of say I1. Tax classification 2 represents a service which points to a

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tax code of say I2. Tax classification 3 represents a rental/lease which points to a tax

code defined as I3. Tax classification 4 points to a tax code of say U1 which represents A/P consumer use tax. Tax classification 5 points to a tax code of say I4 which represents a Taxware product code of 52000 for insurance. Tax classification 6 points to a tax code of say I5 which represents a user defined product code 9937299.

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6.2Define tax classification indicators for plant (MM)


Set tax indicator for plant

Transaction:OMKM

Table:

TMKW1

Above the MM plant tax classification indicators are defined.

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6.3Assign tax classification indicators to plant (MM)


Assign tax indicators for plants

Transaction:OMKN

Table:

T001W

Above U.S. plants are assigned a classification indicator. Please note that this step is not mandatory. This step is only necessary if plant will be used to automatically determine the tax code on MM documents.

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6.4Define tax classification indicators for account assignment (MM)


Set tax indicator for account assignment

Transaction:OMKL

Table:

TMKK1

Above the MM account assignment tax classification indicators are defined.

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6.5Assign tax classification indicators for account assignments (MM)


Assign tax indicators for account assignments

Transaction:OMKO

Table:

T163KS

Above account assignments are assigned a classification indicator. Please note that this step is not mandatory. This step is only necessary if account assignments will be used to automatically determine the tax code on MM documents.

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7.0Master Data Maintenance (SD)

Master data maintenance for taxes is necessary. The customer master must contain the jurisdiction code for taxation location, and the customer tax classification indicator to automatically determine the tax code. The plant must contain a jurisdiction code representing the ship-from location. The material master record must contain a material tax classification indicator to automatically determine the tax code.

7.1Customer master maintenance (SD)

7.2Material master maintenance (SD)

7.3Plant data maintenance (SD)

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It is necessary to link the customer master file with the tax classification that indicate the applicability of taxes for the customer. Normally this would mean retail customer (taxable) or wholesale customer (non-taxable). But other classifications may apply as well. This tax classification indicator is recorded on the billing data screen of the customer master file. This tax classification indicator is used within the SD condition record to automatically select the tax code. The tax jurisdiction code of the ship-to partner is automatically determined and added on the control data screen based upon the address information entered on the previous screen.

Menu Path:Logistics>Sales & Distribution>Master Data>Business Partner> Sold-to Party>Create/Change>Create/Change

Transaction:V-03 or centrally V-09 create

VD02 or centrally XD02 change

Screens: Address, Control data & Billing

Page 487.1Customer master maintenance (SD)

Customer master change initial screen

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Check to make sure the appropriate fields are populated. The minimum data required to automatically determine the jurisdiction code is the country (U.S. or Canada), the postal code (zipcode), and the region (state or province).

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7.1Customer master maintenance (SD)Keep in mind that the more data sent over to the third party tax system for jurisdiction code determination, the more likely a direct hit can be found. When loading master data in batch, it is recommended to send the County (District) in addition to the State (Region), and Zip code (Postal code) if at all possible. This increases the possibility of returning a single jurisdiction code. When multiple jurisdictions are found based on the data being passed to the external tax system, a pop-up window will display the State, County, City in which the appropriate selection can be made (shown below). However, in batch processing there is no way to automatically make this selection if multiple jurisdictions are found. Therefore the jurisdiction code will not be updated within the master data record. The user would then have to go back and change the master records on-line to select and update jurisdiction code within the master record.

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In this example for Broomfield, Colorado using multiple jurisdiction codes exist based upon the address information entered. The user can make the appropriate selection based on the city or district. Notice that if a County (District) were specified, a direct find would have occurred.

Note: Even when a State (Region), County (District), and City are all correctly entered multiple jurisdiction codes may still be returned. This can be due for example to different vanity names being used or a company using a city as their address even though they dont officially reside in that city.

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After selection has been made a message will appear indicating the address data has been supplemented using the external tax system.

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Jurisdiction code will automatically default to control data screen. Please note that jurisdiction codes will vary based on external tax system being used.

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Tax classification indicator must be maintained on billing screen.

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Menu Path:Logistics>Sales & Distribution>Master Data>Products>

Material>{select one e.g. trading goods>{select view=sales 2}> Create/Change

Transaction:MM01 create

MM02 change

Screens:Sales 2 data

Change material master record: initial screen

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Material tax classification must be maintained on the Sales 2 screen.

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7.3Plant maintenance (SD)

It is necessary to maintain the jurisdiction code on the plant in order to send to the external tax system the ship-from destination in A/R (ship-to destination in A/P).

The address information must first be maintained for the plant.

IMG Path:Corporate structure>Definition>Logistics general>Create plant> Details

Transaction:OX10

Maintain plant address data

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It is necessary to maintain the jurisdiction code on the plant in order to send to the external tax system the ship-from destination in A/R (ship-to destination in A/P).

The address information must first be maintained for the plant.

IMG Path:Materials Management>Purchasing>Environment data>Define tax jurisdiction

Transaction:OMGJ

Every time transaction OMGJ is executed a re-determination of plant jurisdiction will occur for all plants which reside within a country configured to use the interface. A message log similar to the one shown above will display any needed messages. If a jurisdiction could not be found due to invalid address information, this data must be corrected via transaction OX10. If a jurisdiction cannot be found unambiguously, then the appropriate selection must be made manually.

Page 59


If only one jurisdiction exists based upon the address information maintain for the plant, then the jurisdiction code will be automatically populated. If multiple tax jurisdictions exist based upon the address information passed to the external tax system then a message will appear: Jurisdiction code cannot be determined unambiguously for plant xxxx. In this situation the Re-assign code button must be depressed to obtain a pop-up window in which you can make your selection.

If the external tax system in unable to determine a jurisdiction based upon the address information maintained for the plant then the following message will appear: Jurisdiction code cannot be determined for plant xxxx. In this situation it would be necessary to go back to transaction OX10 and verify if the address information is correct.

Page 60

7.3Plant Maintenance (SD)

Please note jurisdiction codes vary depending on the external tax system being used.

Page 61

8.0Master Data Maintenance (MM)

Accounts payable master data must also be maintained if taxes are to be determine during the procurement of goods or services out of MM or FI.

8.1Assignment of jurisdiction to plant (MM)

8.2Assignment of jurisdiction to cost center (MM)

8.3Assignment of jurisdiction to vendor master (MM)

8.4Assignment of A/P tax classification indicator to material master (MM)

Page 62

8.1Assignment of jurisdiction to plant

This is necessary to determine the ship-to jurisdiction for all A/P transactions.

The setup for doing this is the same as for SD.

Page 63

8.2Assignment of jurisdiction to cost center

This is necessary when the ship-to jurisdiction is based upon the location of the cost center.

Menu Path:Accounting>controlling>Cost centers>Master data>Cost

center>Create/Change

Transaction:KS01/KS02

The jurisdiction codes will differ depending upon the external tax system being used.

While in create/change cost center depress Address button to maintain cost center address information. The jurisdiction code will be populated automatically.

Page 64

8.3Assignment of jurisdiction to vendor master

Menu path:Logistics>Materials Management>Purchasing>Master Data

Purchasing>Vendor>Create/Change

Transaction:MK01/MK02

Vendor master initial screen

Page 65


If valid address information is entered, the jurisdiction code will automatically be determined by external tax system and returned to SAP.

Page 66


The jurisdiction codes will differ based on external tax system being used

Jurisdiction code is stored on control data screen.

Page 678.4Assignment of A/P tax classification indicator to material master

Menu Path:Logistics>Sales & Distribution>Master Data>Products>

Material>{select one e.g. trading goods}>

{select view=purchasing}>Create/Change

Transaction:MM01 create

MM02 change

Screens:Purchasing

MM tax classification indicator is maintained on Purchasing Screen of material master record.

Page 68

9.0Condition records

There are three types of condition records that exist in tax determination. Tax condition records created in FI, SD, and MM.

The FI tax condition records are based on the tax code and are created in customizing. There will be as many tax condition records created for all tax codes used for A/R sales & use tax , A/P sales tax, and A/P self-assessment use tax where the tax user sells or consumes taxable goods & services. This is the central configuration for tax code condition record maintenance.

The tax condition records created in SD are based upon condition type UTXJ for the U.S. and condition type CTXJ for Canada. The SD condition records pick up a valid tax code, which are used to read the tax condition records set up in FI. These condition records are mandatory for SD tax determination.

A tax condition record can also be created within MM. This is not mandatory but it is necessary to automatically determine the tax code. This condition record is based upon condition type NAVS and access sequence 0003.

9.1FI condition records

9.2SD condition records

9.3MM condition records

Page 69

9.1FI Condition Records

9.1.1Tax code condition record

IMG path:Financial Accounting>Fianancail accounting global

settings>Taxes on sales/purchases>Calculation>Define

taxes on sales/purchase codes

Transaction:FTXP

Table:

A003

Tax code condition records are stored in condition table A003. The country of the plants company along with the tax code which was determined automatically from the SD/MM condition records (see section 9.2/9.3) are used to read the tax condition records stored in table A003. Note: the tax code can also be entered and changed manually in MM and FI.

Percentage rates for the tax jurisdictions are then entered. For tax codes which are greater than 0% (i.e. I1,U1, O1) enter 100% for appropriate Sales tax condition types (XP1E, XP2E, XP3E, XP4E, XP5E, XP6E or XP1I, XP2I, XP3I, XP4I, XP5I, XP6I or XR1, XR2, XR3, XR4, XR5, XR6). Enter minus 100% for Use tax condition types (XP1U, XP2U, XP3U, XP4U, XP5U, XP6U). For 0% tax codes (ie. I0, O0) enter 0% rather than 100%.

When creating a new tax code condition record, after specifying the country, a pop-up window will display where the tax code properties are maintained (see section9.1.3). These tax code properties are stored in T007A under the key fields tax procedure(KALSM) and tax code(MWSKZ).

Page70

9.1.2Tax code properties

IMG path:Financial Accounting>Financial accounting global settings>

Taxes on sales/purchases>Calculation>Define taxes on

sales/purchase codes

Transaction:FTXP

Table: T007A

DO NOT USE SM31(UPDATE) to maintain T007A, as links to other tables will not be properly maintained. Follow the menu path or use transaction FTXP. The table may be reviewed with SM31, Display mode only!

Purpose: To define the allowable combination of tax procedure with tax code and tax type. This table will be checked later when creating condition records for tax jurisdiction codes.

The Relevant to tax, Tax Category, and Product Code fields contain values which are passed to the external tax system.

To add new Tax codes as shown below, input the new code, then a window to enter the tax codes properties will pop-up, then enter:

1. Tax code title

2. Tax code type

V input (A/P, MM)

A output (A/R, SD)

3. Check

the error message indicator (blank means warning) for calculated versus entered tax amounts. Setting the radio button means an error message will be given.

4. EC code

Not relevant for tax interface

5. Target tax code

Not relevant for tax interface

Page 71

9.1.2Tax code properties

6. Relevant to tax:

Blank or 0= Taxability determined from external tax

package

1= Used to override tax exemptions set up in

external tax system if being utilized.

2= Not relevant to taxation, does not access

external tax package

7. Tax Category:

Blank or 0= Normal Sales Tax

1

= Consumer Use Tax (Set this for A/P self

assessment taxes)

2

= Service Tax

3

= Rental/Lease Tax

8. Product Code:

Used to map to external tax systems product code.

Please note that table TTXP must also be maintained.

Page 72

9.1.3Tax code condition record & properties maintenance (A/P)

IMG path:Financial Accounting>Financial accounting global settings>

Taxes on sales/purchases>Calculation>Define taxes on

sales/purchase codes

Transaction:FTXP

Select country U.S.

Page 73


A/P Consumer Use Tax

Positive (100%) must be entered as the tax rate for condition types XP1I-XP6I. Notice that the tax category set up in properties is set to 1 to calculate consumer use tax.

Page 74


A/P Consumer Use Tax (cont.)

Negative (100-%) is entered for condition types (XP1U..XP6U) to force credit entry to the tax liability accounts. Enter tax accounts associated to the appropriate process key.

Page 75


Select country Canada

Page 76

9.1.3Tax code condition record & properties maintenance (A/P)A/P Sales Tax - Canada

A/P Sales Tax condition record for Canada

Page 77

9.1.3Tax code condition record & properties maintenance (A/P)A/P Tax Exempt

For A/P tax exempt condition records, 0% is entered for condition types XP1I-XP6I. After the enter key is depressed the 0% values entered disappear, however,

the lines will become highlighted indicating that they are active. Notice in the properties window the Relevant to tax indicator is set to 2. This will prevent the tax interface from being accessed which will save processing time. If the external tax system is being used to handle tax exemptions, then this indicator must be set to space or 0. This is because the call must be made to the external tax system to access their exemption handling.

Page 789.1.3Tax code condition record & properties maintenance (A/P)

A/P Sales Tax - U.S.A

For A/P sales tax conditions no tax accounts are specified because the taxes are distributed to the inventory account. Tax rates of 100% must be maintained for condition types XP1I-XP6I.

Page 79

9.1.3Tax code condition record & properties maintenance

A/P Sales Tax for Rental/Lease

Tax category field is set to 3 for rental/lease. This value is passed to the external tax system to determine the appropriate tax.

Page 80


A/P Sales Tax for Product code

In the above example the tax code is linked to a product code. The product code can then be mapped to the external tax systems product code via table TTXP.

Page 819.1.4 Mapping Product Code (A/P)

Transaction:SM31

Table:

TTXP

View: V_TTXP

View Maintenance

Ext. tax ID:A = Taxware

V = Vertex

Prod. code:SAP user defined product code

Ext .prd. cd:External tax system product code

Text:

Description (user defined)

Page 82

9.1.5Tax code condition record & properties maintenance (A/R)

IMG path:Financial Accounting>Financial accounting global settings>Tax

on sales/purchases>Calculation>Define taxes on sales/purchase

codes

A/R Tax Exempt

For A/R tax exempt condition types XR1-XR6 must be maintained with 0% rate. Setting the Relevant to tax indicator to 2 will bypass the call to the external tax system. If handling tax exemptions within the third party tax system, then this indicator must be set to 0 or space.

Page 839.1.5Tax code condition record & properties maintenance (A/R)

A/R Sales Tax - U.S.A

For A/R sale tax condition types XR1-XR6 must be maintained with 100% rate.

Page 84

9.1.5Tax code condition record & properties maintenance (A/R)

A/R Sales Tax - U.S.A.


A/R Sales Tax - Canada


A/R Sales Tax (service)

Tax Category is set to 2 for service tax.


A/R Sales Tax for Product code

In the above example user defined product code 9937299 is maintained for this tax code.

Page 88

9.1.6 Mapping Product Code (A/R)

Transaction:SM31

Table:TTXP

View: V_TTXP

View MaintenanceExt. tax ID:A = Taxware

V = Vertex

Prod. code:SAP user defined product code

Ext .prd. cd:External tax system product code

Text:

Description (user defined)

Page 899.2SD condition records

It is necessary to create a condition record for all State, Customer tax classification, and material tax classification combinations being used. This is the final step in setting up SD and it is important! Here you go through each state (region) and match relevant customer tax classifications and material tax classifications to the corresponding tax code. This tax code corresponds to the tax code condition records set up in FI.

The tax condition records are stored using the tax code. When the tax code is automatically determined in SD is will be used (along with the country) to read against the appropriate tax condition records which have been maintained in FI. The tax code properties will contain important information which is relevant to taxation. This includes external product code, tax relevant indicator, and the tax type. This information along with the jurisdiction on the ship-to address of the customer, and the jurisdiction on the ship-from address on the plant, the taxable amount, as well as several other fields will be passed to the external tax package to determine the appropriate tax amount per line item.

Exemptions within SAP must be represented and given a tax code. The entry for that code in the FI setup will have a rate of 0.0. The exception to this, is if tax exemptions are being handled by the external tax system.

Page 90


Menu Path:Logistics>Sales/distribution>Master data>Prices>Taxes>

Create/Change

Transaction:VK11/VK12

Select condition type UTXJ to maintain U.S. condition records. Select condition type CTXJ to maintain Canada condition records.

Page 91


U.S. condition records using UTXJ

The above is a list of condition records set up using the key values of state, customer classification indicator, and material classification indicator, which point to a tax code. Enter the combination for all country, region, and tax classification indicators and map to the appropriate FI tax code.

Page 92


Canada condition records using CTXJ

The above is a list of condition records set up using the key values of state, customer classification indicator, and material classification indicator, which point to a tax code. Enter the combination for all country, region, and tax classification indicators and map to the appropriate FI tax code.

Page 93

9.3MM condition records

9.3.1Assign access sequence to condition type NAVS

IMG Path:Materials management>Purchasing>Conditions>Conditions

for purchase of materials>Define price determination

process->Define condition types

Transaction:M/06

Access sequence added to condition type NAVS.Select condition type NAVS and assign access sequence 0003 to it. Please note that this step is only necessary to automatically determine the tax code. Tax code can also be added or changed manually in MM processing.

Page 949.3.2Creating MM tax condition records

Menu Path:Logistics>Materials management>Purchasing>Master

data>Taxes>Create/Change

Transaction:MEK1/MEK2

Select the condition type NAVS.

In this example condition table based on material is selected.

Page 95

9.3.2Creating MM tax condition records

Classification indicators based on Import and Region are hard coded.

Import (TAXIL)

0 =Domestic purchase

1 = Intercompany purchase

2 = EC intercompany purchase

Region (TAXIR)

0 =Intrastate purchase

1 =Interstate purchase

Page 96


U.S. condition records using NAVS

Tax codes maintained per country and material classification indicators.

Page 97


Canada condition records using NAVS

Tax codes maintained per country and material classification indicators.

Page 98 Appendix A:

2.2 Tax Interface Modification upgrading to 3.0 Standard Tax Interface

Deactivate condition base value formula 300

If a customer has the 2.2 advance modification installed within their system and is upgrading to 3.0, condition base value formula 300 must be deactivated.

Transaction: VOFM

Menu Path: Formulas>Condition base values

Routine Number: 300

Place cursor on routine number 300, and go to the menu

Edit>Deactivate

Update programs have changed

SAP provides update utility programs to update external tax systems files with the necessary data stored within SAP. Within SAP release 2.2 these programs were RFYTXU00 for transaction summary updating, RFYTXU10 for line item updating, and RFYTXU20 to force the tax over in summary to the external systems files without performing a recalculation. These update utility programs in SAP release 3.0 are RFYTXU00 for line item updating, and RFYTXF00 to force the tax data over to the external tax systems files without recalculation.

Tax data stored in TTXU and TTXV must be updated to external tax system

In SAP release 2.2, if the configuration was set to do so, tax data was stored in tables TTXU (summary) and TTXV (line item detail) per creation of an accounting document. In SAP release 3.0 these tables have been changed to TTXI and TTXY for summary and detail data respectively. Due to the above tables and update utility programs changing, data within tables TTXU and TTXV must be updated to the external tax systems files before the 3.0 upgrade takes place in production.

Configuration changes

It is advised that this manual is read thoroughly due to changes in configuration steps and methods.

Page 99Appendix A:

2.2 Tax Interface Modification Upgrading to 3.0 Standard Tax Interface

Communication changes from 2.2 to 3.0

For the interface to Taxware (formally AVP) within SAP release 2.2, CPIC communications were utilized to pass data back and forth between the 2 systems. In SAP release 3.0 all communications are established using RFC (Remote Function Calls). This is SAPs standard TCP-IP protocol used for all its certified interfaces.

Testing utility programs have changed

In SAP release 3.0 testing utility programs RFYTAT00 and RFYTXT00 no longer exist. These programs were used to test CPIC connections for the 2.2 advanced modification only. This document will explain how to utilize SAPs standard test tools to test the interface within 3.0.

Customer user-exit logic must be reapplied

Customer user-exit logic must be reapplied if the user-exit was being utilizedwithin release 2.2. The logic must be added to an include program ZXFYTU01 which is not delivered with SAP and must be created by the user. Please note that the user-exit parameters have changed from 2.2 to 3.0. The new logic must be altered to reflect these parameter changes.

Third party tax interface APIs

Vertex uses the same API (Translink) to interface with SAP for both the 2.2 advance modification as well as with release 3.0. Vertexs Translink would not have to be reinstalled when upgrading from 2.2 to 3.0. Taxware however, does not utilize the same API (Taxwarelink) to interface with SAP in release 3.0 as it did with release 2.2. Therefore, Taxwares Taxwarelink must be reinstalled when upgrading from 2.2 to 3.0.

Product Code

If program FYTXPRCD is being utilized to link a product code to the material master changes will have to be made. SAPs recommended approach would be to utilize the user-exit EXIT_SAPLV61A_001 (see examples in appendix: J). However the same program exists under a new name RFYTXPCD. This

Page 100

Appendix A:

2.2 Tax Interface Modification Upgrading to 3.0 Standard Tax Interface

program will have to be modified the same way as FYTXPRCD was in 2.2. In addition to this, the following lines would have to be uncommented from program FV64A300:

* PERFORM FIND_EXT_PRODUCT_CODE(RFYTXPCD)

* USING KOMP-MATNR TTXD-XEXTN

* CHANGING EXT_PRODCD.

Page 101

Appendix B:General Ledger Accounts

If a G/L account is set up as being tax relevant, then tax amounts must be present in order to create a financial document. For instance, if a revenue account, say 800000, is set up as being tax relevant. The tax category within the G/L master record should contain an output tax indicator. When posting a customer invoice to FI, the system will check to see if tax line items exist for the invoice. If no tax line items exist, a financial document cannot be created. Output tax is used for A/R, and input tax is used for A/P.

Page 102


Menu Path:Accounting>Financial accounting>General Ledger>

Master records>Create/Change

Transaction:FS01/FS02

Material consumption account subject to sales tax

Page 103


Tax liability account

Page 104


Revenue account subject to sales tax

Page 105


Tax payable account

Page 106

Appendix C:Calculate Taxes on Net Amount

C.1:Based on User ID

C.2:Based on Company Code/Region

Within SAP release 3.0C it is now possible to calculate taxes on net base amount based on user-id as well as company and state using the tax interface. Prior to release 3.0C, it was only possible to do this based on user-id when utilizing the tax interface. Of course calculating taxes based on net amount was always possible per company and jurisdiction with SAPs jurisdictional tax handling.

Page 107

Appendix C: Calculate Taxes on Net Amount


Transaction:FB00

To calculate taxes based on net amount select the appropriate variable in transaction FB00. The values maintained here are user-id specific.

Page 108Appendix C: Calculate Taxes on Net Amount


Transaction:SU01

After activating Calculate taxes on net amount via transaction FB00 user parameter ID of F02 will be added to the user profile with value uppercase X. Do not change parameter data within user maintenance transaction SU01. Parameter values are case sensitive.

Page 109



IMG Path:Financial accounting>Financial accounting global settings>

Tax on sales/purchases>Calculation>Specify base amount

Transaction:OB69

Here the tax base can be set to net, based on company code. This functionality will only work in conjunction with setting the tax jurisdiction to calculate taxes on net base amount as well.

Page 110



IMG Path:Financial accounting>Financial accounting global settings>

Tax on sales/purchases>Basic settings>Define tax jurisdiction

code

Transaction:OBCP

Within the define tax jurisdiction transaction, it will be necessary to maintain the highest level jurisdiction code, which will represent the state. Here taxes on net base amount can be set, as well as discount on net amount. This will only work if the company has also been defined to calculate based on net amount.

In the above example, the state jurisdiction code was set up based on the third party tax system being used.

Page 111



It is important to know that SAP DOES NOT allow posting of a document if jurisdiction settings are different per line item. For example a line item which is procured to a New Jersey jurisdiction which is set to calculate taxes based on gross amount, and a line item which is procured to an Illinois jurisdiction which is set to calculate taxes based on net amount cannot reside on the same document. All line items must be set to calculate taxes the same way. This applies to calculating discount as well.

Page 112

Appendix D: Calculate Discount On Net Base Amount

Within SAP release 3.0C it is now possible to calculate the discount on net base amount discarding taxes. This is determined based on company and state using the tax interface. Of course calculating the discount based on net amount excluding taxes was always possible per company and jurisdiction with SAPs internal jurisdictional tax handling.

Transaction: OB70

Here the discount base amount can be set to net value excluding taxes based on company code. This functionality will only work in conjunction with setting the tax jurisdiction to calculate the discount on net base amount as well.

To set the state jurisdiction code to calculate discount on the net base amount follow the example on page 111.

Page 113

Appendix E:Update External Tax System Files

SAP stores all tax information in table BSET. The tax base amount, as well as all tax amounts returned from the external tax system will be stored here. SAP provides report RFUTAX00 which lists all tax information broken down by tax code and tax jurisdiction code.

If a customer chooses to utilize the reporting functionality provided by the external tax system, they must update the external tax systems files. In order to go about doing this, data must first be stored in SAP tables TTXI and TTXY, header level data and item level data respectively. This data can then be passed onto the external tax system using SAP provided update programs.

E.1:Updating SAP tables TTXI and TTXY

E.2:Update utility programs

Page 114

Appendix E:Update External Tax System Files

E.1:Updating SAP tables TTXI and TTXY

SAP can be configured to capture the relevant data needed to be passed to an external tax systems files for reporting purposes. Once configured, upon posting of a financial document containing information which is relevant for tax reporting, the necessary tax information of the document is posted to two SAP tables, TTXI and TTXY. (For the 2.2 tax interface modification these tables were called TTXU and TTXV. See Appendix A, page 99). The updating of TTXI and TTXY can only take part after tables TRWCI, TRWPR, and TRWCA are maintained with the appropriate entries. SAP delivers these tables with the necessary entries, however table TRWCA must be activated in order to update TTXI and TTXY (see chapter 4.2, page 29 Activate external updating). Below are the following entries which should come delivered.

Transaction:SM31

Table TRWCI:

Component: EXTX

Table TRWCA:

Component:EXTX

To year:2999

Activ:

Taxes on sales/purchases>Basic settings>Generate calculation procedure

Transaction:OBYZ or

Transaction:VK01Usage:A Application: TX

Page 119

F.1:Condition types (FI)

Transaction: OBQ1 or VK01.

Tables:T685, T685A

Condition Types Which Should Exist:XP1E

XP1I

XP1U

XR1

XP2E

XP2I

XP2U

XR2

XP3E

XP3I

XP3U

XR3

XP4E

XP4I

XP4U

XR4

XP5E

XP5I

XP5U

XR5

XP6E

XP6I

XP6U

XR6

The condition types that end in I are used for input taxes, when the vendor includes tax in the sale. Taxes in this case are usually included in the capitalization of the material(s) purchased.

The condition types that end in E are for optional use, and are used when the user wants to break out tax amounts and report them to an expense account

The condition types that end in U are for use taxes. It is typically used when the vendor does not include tax.

Page 120F.1:Condition types (FI)

The condition types listed above on page 119 below are tax interface specific. If the condition types do not exist, check T685A in client 000 within the same transaction OBQ1.

To compare, and copy data from client 000 perform the following steps:

1.Menu path: Utilities>Compare>Client 000

Page 121


2.Switch from display to change mode

Menu path: Table view>Change


3.Select entries which are missing from your client and need to be copied from client 000. This is done by positioning your cursor on the first entry to be copied and choosing Select, then positioning the cursor on the last entry to be copied from client 000 and selecting Select end of block.

The selected entries should now be marked for copying within the left margin.

Page 123


4.Copy the selected entries.

Menu path: Block>Copy

Page: 124 F.1:Condition types (FI)

5.The data will be copied to your target client. Verify that the entries are

correct, than back out of the screen and SAVE the data.

Page 125


Detail Screen for XP1E condition type


Detail Screen for XP4E condition type

(Note: the condition category field for XP5E and XP6E is also 4)

Page 127 F.1:Condition types (FI)

Detail Screen for XP1I condition type


Detail Screen for XP4I condition type

(Note: the condition category field for XP5I and XP6I is also 4)


Detail Screen for XP1U condition type

Page 130


Detail Screen for XP4U condition type

(Note: the condition category field for XP5U and XP6U is also 4)

Page 131


Detail Screen for XR1 condition type



(Note: the condition category field for XR5 and XR6 is also 4)

Page 133

F.2: Access sequence (FI)

Transaction:OBQ2 or VK01

Table:

T682

Access sequence:MWST

If MWST does not exist, add it to table T682. Note: table T682 is client independent.

Access sequence: MWST

Page 134

F.2Access sequence (FI)

Access sequence MWST should contain condition table 003.

Page 135

F.2 Access sequence (FI)

Condition table 003 should contain selection fields country and tax code.

Page 136

F.3Tax Procedure (FI)

Transaction:OBQ3 or VK01

Tables:T683, T683S

Check (double click) on the procedure TAXUSX to make sure condition types like the following have been assigned. If the procedure TAXUSX does not exist, check T683, T683S in client 000 using program using the same step described for coping condition types in section F.1 of this appendix. Note that for pricing procedures, first table T683 which contains only the tax procedure name must be copied, then you must go into details and copy the entries from table T683s.

Tax Procedure: TAXUSX

Page 137


Tax Procedure: TAXUSX (cont.)

Page 138



Page 139



Page 140



Make sure alternative condition type formula 300 is maintained for the tax amount. Also check alternative condition type formulas 301-306 are maintained for condition types: (XP1I..XP6I, XP1E..XP6E, and XR1-XR6). Alternative condition type formulas 311-316 must be maintained for condition types (XP1U-XR6U).

Page 141

AppendixG: Control Data for Pricing (SD)

G.1Condition types (SD)

G.2Access sequence (SD)

G.3Pricing Procedures (SD)

G.4Relating Document Types to Procedures (SD)

Data can be maintained centrally using:

Transaction:VK01 Usage: A Application: V

Page 142G.1Condition types (SD)

IMG Path: Sales and distribution>Basic functions>Pricing>

Pricing control>Define condition types

Transaction:V/06 or VK01

Tables:

T685, T685A

Condition types which should exist:

XR1

XR2

XR3

XR4

XR5

XR6

UTXJfor country U.S.

CTXJfor country Canada

Check to make sure the above condition types (XR1..XR6) have been defined in this table. These condition types are tax interface specific tax condition types. Also make sure condition type UTXJ exists for the U.S. and condition type CTXJ exists for Canada.

If the condition types do not exist, copy the appropriate entries from table T685A in client 000 using the same steps described in section F.1 of appendix F.

Page 143


Detail screen for UTXJ condition type

Page 144


Detail screen for CTXJ condition type

Page 145



Page 146G.1Condition types (SD)


(Note: the condition category field for XR5 and XR6 is also 4)

Page 147


Check to make sure the access sequence (UTX1) exists in the client where taxes are being setup. If UTX1 does not exist, create it as shown below in table T682 for the condition type and T682A for the details. Note: Access sequences are client independent. UTX1 access sequence is used for condition type UTXJ and CTXJ. Condition types XR1 - XR6 do not use an access sequences.

IMG Path:Sales and Distribution>Basic functions>Pricing>

Pricing control>Define access sequences


Table:

T682

Access sequence: MWST

Page 148


Access sequence UTX1 should contain condition table 010.

`

Page 149G.2Access sequence (SD)

Access SeqCondition table

UTX1 40 Country/State/Customer Classif. 1/Material Classification 1

ConditionDoc. Field

Departure countryDeparture country

RegionRegion

TaxClass1-Cust.TaxClass1-Cust.

TaxClass1-Matl.TaxClass1-Matl.

Page 150


SAP delivers a template pricing procedure (RVAXUS). When creating your own pricing procedure make sure conditions UTXJ, XR1, XR2, XR3, XR4, XR5, and XR6 are set up the same as in RVAXUS. If the condition types do not exist,

If the condition types do not exist, copy the appropriate entries from table T683 and T683S in client 000 using the same steps described in section F.1 of appendix F. Note that for pricing procedures first T683 which contains only the pricing procedure name must be copied, then you must go into details and copy the entries from T683S.

IMG Path: Sales and distribution>Basic functions>Pricing>Pricing

control>Define and assign pricing procedures


SAP template pricing procedure RVAXUS for the U.S.

Page 151G.3Pricing Procedures (SD)

The FROM entry for condition types UTXJ, XR1..XR6 should contain the Level number of the taxable amount to be sent to the external tax package. Condition type UTXJ must have the Statistical indicator set. Keep in mind that although SAP delivers pricing procedure RVAXUS with the account keys populated for condition types XR1..XR6, these account keys are not used in posting tax values to FI. The account keys set up in the tax procedure TAXUSX are used to post tax values to FI.

Please note: as of release 3.0 no Alternative Condition Base Value formulas are used as they were in the 2.2 tax interface modification. Notice that condition type UTXJ uses Alternative condition type formula 300, whereas XR1 through XR6 condition types use Alternative condition type formulas 301-306 respectively.

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SAP template pricing procedure RVAXCA for Canada

A pricing procedure for Canada is not delivered. Iit is up to the user to add the appropriate condition types above to their Canadian procedure.

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G.4Relating Document Types to Procedures (SD)

Document types must be related to the tax pricing procedures in order for the document to calculate the correct tax.

IMG Path: Sales and Distribution>Basic functions>Pricing>

Pricing control>Define and assign pricing procedures

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H.1Check and change settings for tax processing

Check that the account processing keys in table T007B reflect accounts that are liabilities for taxes. Transaction OBCN is used to create new account keys in T687/687T.)


settings>Taxes on sales/purchases>Basic settings>Check and

change settings for tax processing

Transaction:OBCN

Table:

T007B

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Process keys for condition types XP1E..XP6E, XP1U..XP6U, and XR1..XR6 should have the posting indicator set to 2 (separate line item).

Page 156Appendix H:Verify Account Processing Key Setup


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Process keys for condition types XP1I..XP6I should have posting indicator set to 3 (distribute to relevant expense/revenue items).

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Appendix H: Verify Account Processing Key Setup

H.2Define tax accounts


settings>Tax on sales/purchases>Posting>Define tax accounts

Transaction:OB40

Table:

T030K

Verify that the account keys used (like VS1..VS4 and MW1..MW4 , above), are defined. Then make sure accounts (i.e. NVV) where the original account on the document line is to be charged do not exist, as the system will book charges to the same account as the base. You will need to identify the GL chart of accounts (e.g. CAUS) the first time through.Account keys like NVV, with a posting indicator 3, will not appear on the list

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1. GL or Cost Element account assignment Liabilities & Expenses.

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2. Posting keys (e.g.40 or 50)

Page 161Appendix H: Verify Account Processing Key Setup


3. Rules

Page 162Appendix H: Verify Account Processing Key Setup

H.3General Ledger Maintenance

Menu Path:Accounting>Financial accounting>General Ledger>Master

Records>Create>Change>Display

Transaction: FS01/FS02/FS03

For the accounts in the prior step (T030K), Review the account definition and Tax Category field in the account masters that will be used for tax liabilities. The Input and Output determination on the account master is important.

Then consider the asset accounts for nontaxable(?) purchases of inventory. Also consider the set of accounts and primary cost elements that correspond to the NVV account processing key; their category should be Input or nothing. Check revenue accounts used in SD, too.

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H.3General Ledger Maintenance

The sales and use tax procedure for MM/FI allows the charge (Debit) for taxes to go to a separate account, when used typically titled sales tax expense clearing. As delivered,

the G/L accounts corresponding to expense to separate accounts, (XP1E, XP2E, etc.) are clearing accounts. Most users will not use this method, but will choose to have taxes go to the same account as the charge, therefore the I series (e.g. XP1I) use an account key with rules like NVV as delivered. Liability accounts for A/P sales and use tax liability and A/R sales tax liability(XP1U..XP4U, XR1..XR4) need to be defined. The GL accounts corresponding to the account keys need to be setup as appropriate.

On the G/L account master record there is a field called tax category. Following is a small guide of how to populate that field for different accounts.

A/P Reconciliation Account 160000*All tax types allowed

A/R Reconciliation Account140000*All tax types allowed

Sales Revenue

800000+Only output tax allowed

Exp./Materials consumed410000-Only input tax allowed

A/R Sales Tax (State)

175001>Output Tax

A/R Sales Tax (County) 175002>Output Tax

A/P Use Tax

154010

Documents

Tax Interface