Defining Tax Procedure, Tax Code and Tax G/L Account
This post shows:
- How to set up tax determination procedure
- Assigning tax determination procedure to a country
- Creating different tax codes for country
- Assigning tax G/L account to the chart of account + account key
- Creating condition records for tax condition type and assigning it to the tax code
Go to Tx- SPRO and from IMG Activity , select Check Calculation Procedure
The tax determination procedure is based on the condition technique.
Choose Access Sequences option.
Here a new access sequence can be created with New Entries button. Here we have already an access sequence MWST is present. Select MWST and select Accesses from left hand side.
The access sequence contains – one access line with condition table as 003. Choose the access line and select Fields from left hand side.
It includes two fields Country and the tax code.
Now select the Define Condition types option .
A new tax condition type can be created by selecting the New Entries button. Already a condition type MWAS is created . Double click on it.
The condition class should be D and this condition type is assigned to the access sequence MWST.
Now choose the option Define Procedure.
A new tax determination procedure can be created by selecting the New Entries button. Select the tax procedure TAXD and choose control data from left side.
It includes many condition types . The condition type MWAS is also assigned with accounting key MWS.
Next step is to assign the tax determination procedure to the country. Select the option: Assign Country to Calculation Procedure.
The tax procedure is assigned to the country.
Next step is to define tax codes. In a country , there are many different taxes for different things like for goods, services. Select the option Define Tax Codes for sales and purchase.
Now provide the country first and continue.
Here you can provide a two character tax code to be created and hit enter key.
Provide a Z1 and the below screen appears. Here you have to specify tax type as input or output tax and other related fields.
Already tax code- A0 create in the system . Provide that and see the details.
The tax procedure is determined from the country and the tax code A0 is an output tax type.
In the table section all tax type like base amount, output tax, input tax, Travel Expenses(%) appears from the condition types assigned to the tax procedure.
The tax percentage is 0,00. Means when tax code A0 is assigned then the output tax would be 0.00 %.
Similarly we have tax code – A1 with 19% for the output tax.
Similarly we have tax code – A2 with 7% for the output tax.
Now we have to define the tax G/L account.
Select Define Tax Account option y navigating along the highlighted SPRO path.
Double click on the Transaction – MWS .
provide the company code chat of account and continue.
Here you can provide G/L account to store the tax entries.
The demo is shown for company code- 1000. The chart of account for the company code- 1000 as below.
Up to now in FI module we checked how tax procedure is created and assigned to a country, defining different tax codes for each county and assigning the tax G/L account with the chart of account and the transaction MWS.
Let’s check the pricing procedure in SD side.
We have pricing procedure RVAA01 is assigned to the tax condition type MWST and accounting key MWS.
We have the customer pricing procedure as below.
We have the document pricing procedure as below.
The sales order type – DR is assigned to the document pricing procedure.
Customer is assigned to the customer pricing procedure.
Here we have assigned the pricing procedure to the sales area, doc pricing procedure & customer pricing procedure.
The customer tax class & material tax class are defined in below highlighted SPRO paths.
Customer Tax classes.
Material tax classes.
Country DE is assigned to the tax category as MWST.
Now lets check the customer master. The tax class for customer master is 1.
Lets check the material master. The tax class for material is 1.
To create condition records for the pricing condition type Tx- VK11/VK12/VK13 are used for create/change/display purpose.
As we are looking how tax G/L account is determined, lets try to create the condition record for the tax condition type MWST. Execute Tx- VK11 and provide tax condition type MWST and hit enter key.
For the pricing condition type MWST, there are 3 access lines assigned to the access sequence. Select second one and continue.
Provide a Country as DE in the header section.
Then from the TAX CODE column, the field provides a F4 help which lists all the tax codes defined for the country DE with the tax procedure.
Once the Tax class for customer is provided and tax class for material is provided,choose the tax code, accordingly the amount field will be filled ( measured in percentage-%).
Create an order in Tx- VA01 and provide the sold to party and material .
Go to the item details.
Select analysis button.
The pricing procedure is determined as RVAA01.
For condition type MWST, the condition record is found.
Go back and save the sales document.
create a billing doc for the sales doc- Debit Memo request. Go To- Tx – VA01 and open the sales doc in change mode.
Save it to create billing doc.
Open the billing doc in Tx- VF03 and choose Accounting button. Choose Accounting Document.
The G/L account number is determined as 480000 for the tax line.