Use of tax code

[Former Member]

Hi,

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.

[former_member217082 · Accepted solution]

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

Regards

Srinath

[Former Member · Accepted solution]

How does finanace make use of tax code?

[Lakshmipathi · Accepted solution]

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.

thanks

G. Lakshmipathi

[jignesh_mehta3 · Accepted solution]

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.

Thanks,

Jignesh Mehta