Tax on Sale Purchase

5/22/2018 Tax on Sale Purchase

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Tax On sales / Purchases SAP 4.7

Configuration Steps1. Check Calculation Procedure................................................................................ 12. Assign Country to Calculation Procedure.................................................................. 33. Check and Change Settings for Tax Processing ........................................................... 44. Specify Structure for Tax Jurisdiction Code .............................................................. 45. Define Tax Jurisdictions...................................................................................... 5

6. Define Tax Codes for Sales and Purchases ................................................................ 77. Define Tax Accounts .......................................................................................... 8

1. Check Calcul at ion Pr ocedure

Pat h Img -> Financial Account ing -> Financial account ing global set t ing -> Tax on

sales/pur chases - > Basic Set t ing -> Check calculat ion Procedur e

T Code OBYZ

In this activity , we will configure three sub activityAccess sequence :In this sub step we will define the access sequence for determination priceto considered as base value for various combination of plant / customer/ materialDefi ne Condit ion ty pe: In this sub step we will create different type of input tax / out puttax.

Fields Description Purpose

Condit. Type Condition type The condition type is used for different functions. In tax forexample, the condition type lets you differentiate betweendifferent kinds of tax based upon tax % nad tax type

Access Seq. Access sequence With the access sequence you definethe condition tables used to access the condition recordsthe sequence of the condition tableswhich field contents are the criteria for reading the tables

Document No.SNPFIIMG10008 Page 1 of 8

Copy right S.N.Padhi 2005http://www.surya-padhi.net/

Dated: Friday, October 07, 2005


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Control Data 1Cond. Class Condition class Preliminary structuring of condition types e.g. in surchages

and discounts or prices.Use : Allows standardised processing of individual conditionclasses within the system

Calculat. Type Calculation type

for condition

Determines how the system calculates prices, discounts, or

surcharges in a condi t ion. For example, the system cancalculate a price as a fixed amount or as a percentage basedon quantity, volume, or weight.The calculation type can be set when generating newcondition records. If this does not happen, the calculationtype maintained here is valid for the condition record

Cond. Category Conditioncategory

(examples: tax,freight, price,

cost)

A classification of condi t ions according to pre-definedcategories (for example, all conditions that relate to freightcosts).

Rounding Rule Rounding rule The rule that determines how the system rounds off conditionvalues during pricing. The last digit will be rounded.

StrucCond Structurecondition controls whether the condition type should be a duplicatedcondition or a cumulated condition.This control is only helpful when you use bill of materials orconfigurable materials. A duplicated condition is duplicatedinto all assigned items. A cumulated condition contains thenet value of all assigned items.

2ndhalf of the above screen
http://e/SAPEVENT:DOCU_LINK/GL:conditionhttp://e/SAPEVENT:DOCU_LINK/GL:conditionhttp://e/SAPEVENT:DOCU_LINK/GL:conditionhttp://e/SAPEVENT:DOCU_LINK/GL:condition


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Define Procedure: In this activity we defined the steps for determination tax from baseamount and various dependancies

2. Assign Countr y to Calculat ion Procedure


sales/pur chases - > Basic Set t ing -> Assign Count r y t o Cal culat ion Procedur e

T Code OBBG

In this activity, you enter the key for the calculation procedure, which determines the conditionswhich are allowed per document and which defines the sequence of the conditions in the documentfor each country.





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3. Check and Change Set t ings f or Ta x Pr ocessing


sales/pur chases - > Basic Set t ing -> Check and Change Set t ings for Ta x Processing

T Code OBCN

In this activity you make the necessaryspecifications for posting taxes. In doing this youspecify under a process key the followingindicators:

Account Key / Process Key . To which Glaccount is attached

Fields Description PurposeProcess Internal

processing keyThe internal processing keys are used by the system todetermine accounts or posting keysfor line itemswhich arecreated automatically.The processing keys are defined in the system and cannot bechanged by the user

General detailsDescription Description of the processing Key

Tax Type Output tax, input tax, additional taxes, or "not tax-relevant"can be specified as the tax type

Not deductiable For this, tax amounts are marked as not deductible

Posting Indic. Here you specify whether the tax amount is posted separately

or distributed to expense or revenue items.Not Discnt rel. This indicator is set only for Canada. If you select it, the

system does not take into account the corresponding taxamount when determining the tax base.

4. Specify St ruct ure for Ta x Juri sdict i on Code

Path Img -> Financial Accounting -> Financial accounting global setting -> Tax onsales/purchases - > Basic Setting -> Specify Structure for Tax Jurisdiction Code

T Code OBCO

In this activity, you determine the structure of the tax jurisdiction code. This code is used for

calculating taxes which are defined below the federal level (for example, US taxes, Canadian taxes).The tax jurisdiction code can be subdivided into a maximum of four levels (for example,state/county/city/district). This way the tax rate is defined per level and the tax value is calculatedindividually per level.If an entry exists for a calculation procedure, then tax processing for this calculation procedure isswitched over automatically to the tax jurisdiction code method.In this activity you can also set whether taxes should be calculated at the line item or the "taxcode/tax jurisdiction code" level.



http://e/SAPEVENT:DOCU_LINK/GL:posting_keyhttp://e/SAPEVENT:DOCU_LINK/GL:line_itemhttp://e/SAPEVENT:DOCU_LINK/GL:line_itemhttp://e/SAPEVENT:DOCU_LINK/GL:posting_key


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Fields Description PurposeRefere Country

ReferenceThe country reference is a key that creates the reference to acountry.

Name Name of the TaxJurisdiction CodeStructure

Name of the Tax Jurisdiction Code Structure

Lg Length of theNth Part of the

Tax JurisdictionCode

Length of the Nth Part of the Tax Jurisdiction Code

Lg Length of theNth Part of theTax Jurisdiction

Code



Code



Code


Tx In Determine taxesline-by-line

Taxes are determined on a line-by-line basis. A cumulativeamount based on tax code or jurisdiction is not calcualted forinternal tax information.This function is only activated if the taxes are calculated bythe system during posting or simulation.Since multiple tax items can be created for each line item,and the maximum number of internal line items is 999, thismaximum number of allowed items is, in effect, reduced,when compared to the lines allowed where line-by-line taxcalculation is not activated.Line-by-line tax calculation is not supported for postings inexternal company codes!

5. Defi ne Tax Jurisdict ions

Path Img -> Financial Accounting -> Financial accounting global setting -> Tax onsales/purchases - > Basic Setting -> Define Tax Jurisdictions

T Code OBCP

In this activity, you specify the tax jurisdiction code per tax calculation procedure.





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The tax jurisdiction code consists of up to four parts depending on the tax jurisdiction code structurefor the relevant calculation procedure: the state code, the county code, the city code, and a localcode component. The system uses these component parts to determine the tax rate for each taxauthority.

Fields Description PurposeJurisdict. Code Tax Jurisdiction

CodeThe tax jurisdiction is used for determining the tax rates inthe USA. It defines to which tax authorities you must pay yourtaxes. It is always the city to which the goods are supplied

Name Name of the TaxJurisdiction Code

Structure

DiN Discount baseamount is thenet value

Indicator with the effect that the sales tax is not contained inthe base amount for discount calculation.DependenciesThe rule that determines how the base amount for discountcalculation is to be determined is subject to the relevantcountry legislation. Either the company code table or the

jurisdiction code table is used for control purposes.If tax is calculated using the jurisdiction code, the entries inthe company code table are invalid. Control then takes placeat the highest level of the definition of the jurisdiction code.This method of tax calculation is used in America, forexample.ExampleIn Germany, the possible discount deduction is first taxedwhen the document is posted. A tax adjustment is then madewhen the balance is paid. In this case, the base amount fordiscount calculation is gross, that is, it includes sales tax.

TxN Base amount fortax is net of

discount ?

Indicator that causes the base amount for the calculation ofsales tax to be reduced by the discount share.

DependenciesThe rule used to determine the base amount for thecalculation of sales tax is subject to the relevant countrylegislation. Either the company code table or the jurisdictioncode table is used for control purposes.If the jurisdiction code is used for tax calculation, the entriesin the company code table are not valid. Control then takesplace at the highest level of the definition of the jurisdictioncode. This method of tax calculation is used in America, for





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example.ExampleIn Great Britain, the base amount for sales tax is the invoiceamount less the agreed discount.NoteIf the tax base amount is net, the net value also has to be

chosen as the discount base.Exception: If tax is calculated using the jurisdiction code(USA), the combination 'Net tax base' and 'Gross discount base'is also permitted, however, no tax adjustment is made forpayment with a discount deduction.Example : In the following an example is given for eachpossible combination. In each case, the material value is100.00, the possible discount percentage 3.00 %, and the taxpercentage 10.00 %.1) Gross tax base, Gross discount base

Tax base 100.00 ==> Tax amount 10.00Possible discount amount (3.00 % of 110.00) 3.30Invoice amount 110.00

2) Gross tax base, Net discount baseTax base 100.00 ==> Tax amount 10

6. Defi ne Ta x Codes f or Sal es and Purchases

Path Img -> Financial Accounting -> Financial accounting global setting -> Tax onsales/purchases - > Calculation -> Define Tax Codes for Sales and Purchases

T Code FTXP

You have to define a separate tax on sales/purchases code for each country in which one of yourcompany codes is located.Each code contains one or more tax ratesfor 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 .



http://e/SAPEVENT:DOCU_LINK/DS:GLOS.3526B84DAFAB52B9E10000009B38F974http://e/SAPEVENT:DOCU_LINK/DS:GLOS.3526B84EAFAB52B9E10000009B38F974http://e/SAPEVENT:DOCU_LINK/DS:GLOS.3526B84EAFAB52B9E10000009B38F974http://e/SAPEVENT:DOCU_LINK/DS:GLOS.3526B84DAFAB52B9E10000009B38F974


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In this activity , we will define .o Tax code , for a country and tax procedureo Type of tax , whether the defined tax code is a out put tax or input taxo Tax rate for condition type

7. Defi ne Ta x Account s

Path Img -> Financial Accounting -> Financial accounting global setting -> Tax onsales/purchases - > Posting -> Define Tax Accounts

T Code OB40

In this activity, you specify the accounts to which the different tax types are to be posted. The systemdetermines these accounts for automatic postings.

In this activity we have to assign GL account no for each and every transaction Key/ Account key thathas been assigned at check calculation procedure.

Note :1) Tax on sale or purchase code will be defined at account master control data tab. Here we can

defined all tax code for input tax or output tax for tax procedure attached to country andcompany code or a single tax code.

2) Tax procedure is attached to country not company code, and company code is attached to country.Hence tax procedure indirectly attached to company code.

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Tax on Sale Purchase