how is tax determined?

[Former Member]

so, i had a question asked in an interview. they wanted to know what the sap process was for tax determination. the question went something like this, you're in country A and the customer is country B and places an order, how does SAP know what the tax should be? he gave a hint that it has to do with Plant. he said we don't specify the country in the master data, so what is the process that SAP uses. and again, he said Plant is the big hint. any suggestions?

[Former Member]

Hi

These can help you:

http://help.sap.com/saphelp_46c/helpdata/en/4d/fdeb47b535d1118b3f0060b03ca329/frameset.htm

http://help.sap.com/saphelp_46c/helpdata/en/34/60b19dae724effe10000009b38f91f/content.htm

[Former Member]

Hi,

You specify the valid tax types in transaction OVK1. More than one tax type can be defined for a country by defining the sequence.

The SAP System determines the taxes automatically within pricing.

In the standard SAP R/3 System, the elements of tax calculation are predefined (for example, tax condition type "MWST" for taxes on sales and purchases).

Assign the plant for Tax Determination in OX10, using the country key, the SAP System recognizes which tax type is valid for a plant and thus which taxes are relevant when creating an SD document.

Define the Customer Taxes in OVK3, you will maintain the tax code in Customer Master.

Define the Material Taxes in OVK4, which will then be maintain in Material Master

Regards,

Rajendra Sonawane

[Former Member]

Hi

Tax is determined from Tax classification of the customer or Material master and in V/06 in condition type detail Condition categrory will 'D'

Please have a look at MWST condition type for exmple,

Basic settings will be,

Sales and Distribution -> Basic Functions -> Taxes. and in FI module

In financial accounting, you can determine the sales tax Customizing using the menu path Financial Accounting -> Financial Accounting Global Settings -> Tax on Sales/Purchases

Regards,

Siva

[Former Member]

Hi

Kindly chek the contry will be there in the mat master &customer master

Regrads

Damu

[Former Member]

that's what i said but he said it has to do with Plant. what has to do with plant? how are plant and tax connected?

[Former Member]

Hi

The tax or duties generally depend upon 2 criteria 1. from where goods originate or transferred and 2.where they reach.

so For a manufacturer the region,country of plant is origin of goods . while country ,region,city ,county of Ship to party is destination.

This way plant is the base which determines region or country for getting relevant tax liability.

I hope this answers your query,

Regards

Mandar