Showing results for 
Search instead for 
Did you mean: 

Use of tax code

Former Member
0 Kudos


What is the use of a tax code? I mean once the pricing is done in a sales order and its subsequent documents are created till billing then is there any sap related transaction which uses tax code or it is just used to determine appropriate conditon record in creation of sales order.

View Entire Topic
Active Contributor
0 Kudos

Hi Ronaldo

A tax code is a link between SD & FI . So that is the reason we maintain the tax code when we maintain condition record for tax condition type



Former Member
0 Kudos

How does finanace make use of tax code?

Active Contributor
0 Kudos

Finance has nothing to do with tax code. As already suggested, based on some combination, you would be maintaining the tax code so that while creating sale order, for whatever combination the sale order is created, accordingly the tax code will flow. Based on this tax code only, tax values will be determined in billing which will then be transferred to finance.

So in finance, if they want to see the tax values in Accounting document, tax code is a pre-requisite in SD.


G. Lakshmipathi

Active Contributor
0 Kudos

Dear Friend,

While Posting Invoice to Accounts from SD side, Tax code is useful to determine different Tax GL Accounts.

Also if the Finance / Sales Tax Departments was to generate State (Region) wise Sales Taxation reports, then Tax Codes are useful on creating required reports.


Jignesh Mehta