To recap from the preceding blog, we learnt how to configure tax events and accounting attributes for tax events.
In this blog, we will understand how to configure tax codes.
Configure Tax Codes
Tax Code is the unique combination of Tax Event, Tax Type, and Tax Rate Type codes for a particular country/region, for example, ‘Domestic Sale of Goods in Serbia, VAT charged at Standard Rate’.
The technical name of the tax code in the SAP Business ByDesign System is Taxation Characteristics Code.
You can create Tax Codes in the SAP Cloud Applications Studio following the steps below:
Follow steps 1 and 2 as outlined in the section ‘Configure Tax Types’ in Part 1 of this blog series and continue with the below steps.
Under Business Configuration Object -> Name, select Product Taxation Characteristics from the drop-down list.
Click Next to continue.
Under Define the Values of Your Business Configuration Set, select the checkboxes to define whether you can add or delete values during fine-tuning.
Select the Tax Code node and enter the values as below:
CountryCode: Specify the country/region for which you need to configure the tax codes.
Note: The country/region you want to configure must be available in the tax country table already delivered by SAP. For the list of delivered tax countries, see Tax Basic Countries. Before specifying the country/region code, please see Prerequisites.
Code/Content: Specify the new tax code according to your requirements.
Tax Event Type Code: Specify the Tax Event Type Code according to your requirements. For example, Domestic Purchase.
Valid From: Specify the Tax Code validity start date. If you do not know the exact date on which the tax code became valid, it is sufficient to specify a date that is earlier than the tax date of business transactions that will be processed in your system.
Valid To: Specify the validity end date for the tax code. If the tax code does not have a defined end of validity, enter 31.12.9999.
Obsolete Indicator: Select this checkbox if you want to indicate that the tax code should not be selected anymore for any business transaction.
Taxation Characteristics Name: Enter a description for the new tax code. Tax codes usually specify the complete combination of tax attributes. For example, Domestic Sale, Standard Rate.
Select the Tax Code - Assign Tax Types node and enter the values as below:
Product Taxation Characteristic Code: Enter the new tax code.
Tax Type: Specify the tax type relevant for the tax code. These tax types must be in sync with the tax types of the tax event used in the tax code.
Tax Rate Type Code/Content: Specify the applicable tax rate type for the entered tax code. This field must be empty if the corresponding tax event of the tax code is non-taxable.
Tax Deductibility Code/Content: This field must be empty if the corresponding tax event of the tax code is non-taxable.
For the tax codes created for sales, this field must be empty. For tax codes created for purchasing, you must specify if the tax amount is fully deductible, not deductible and so on. Tax deductibility codes cannot be currently configured through PDI, they have to be configured in the fine-tuning activity Tax Settings and Purchasing.
The tax codes for purchasing must be configured in fine tuning activity, Tax on Goods and Services -> Define Tax Codes to assign the deductibility codes defined.
To deploy the new BC set, follow steps as outlined in the section ‘Configure Tax Types’ in Part 1 of this blog series.
Once you configure and deploy the new BC set, you can also access the new tax types, tax events, and tax codes you defined using the fine-tuning activity Tax on Goods and Services for non-localized countries/regions.
What's next ?
We will have a detailed look and understand the steps of configuration of Tax Rate Schedules and Tax Decision Tree in part 4 of this blog series as mentioned above.