taxation in US

[Former Member]

Hello Gurus (who know us market)

Those who have worked on US project, Please let me know the unique points in USA projects w.r.t pricing; taxation etc..

Points will be definitely rewarded for a quick and good one

[Lakshmipathi]

Dear kella

Though I dont have knowledge in US taxation, may be this link will be of helpful to you.

[Tax Jurisdiction Code |http://help.sap.com/saphelp_46c/helpdata/en/fa/99bc1c339811d3958d00a0c929f4c9/frameset.htm]

Drill down on the left tab of the link for more information.

Thanks

G. Lakshmipathi

[Former Member]

Hi,

Taxes: A tax is a financial charge or other levy imposed on an individual or a legal entity by a state or a functional equivalent of a state.

Purpose: There are many types of taxes, in Business Scenarios. The very relevant one are Input Taxes & Output Taxes

• Input Taxes are during Purchasing Transactions

• Output Taxes are during Sales Transactions

Every Country has its own set of Taxes levied when Sales takes place. The tax calculations are likely to be complex in nature and can have very adverse effect on the bottom line. Hence it is important to have clear understanding of relevant taxes

What is sold, where is it sold, How is it sold & When is it sold can influence relevant taxes

In US the taxes are at Jurisdiction Level

In UK the taxes are considered as VAT

In India there are Local Sales Tax and Central Sales Tax & VAT

Use

 Output Taxes are a type of a Sales Tax when Sales Activity takes place.

 Output Taxes are of two Types:-

• Domestic Taxes

• Export Taxes

 When sales activity takes place, output taxes are levied to the customer.

 The output Tax revenue is collected and then paid to the respective government authority as the case may be.

 This functionality of output Taxes helps us in calculating the taxes for various types of scenarios, accounting of tax and payments to the government authority.

 Customers are charged output Taxes depending whether the customer is a domestic customer or an export customer.

 In most of the countries, the output Taxes for Exports are ZERO.

 VAT is a type of an output Tax which is uniform in the entire country.

Output Taxes in Country:

 Each country has its own set of rules for calculation of Output Taxes

 In this courseware, we shall cover the mapping of Output Taxes in three countries:-

• USA

• UK

• India

Types of Output Taxes in U.S.A. In U.S.A., the taxes are related to the Jurisdiction code which is a combination of pin code & region.

 The Jurisdiction code is stored in the customer master.

 The Jurisdictions (State, County, Town or lower) are several levels

 The Taxes are:-

• Domestic Taxes

• Export Taxes

Award points,

Vamsi P.