Tax determination in sap sd

Let’s see how tax determination process works. For tax determination, there are techniques which can be used. They are condition Method technique which is mainly used to calculate the taxes. And also there are Tax Calculation Procedures which are with the tax codes which can be used for calculation of the tax amounts.

Now we will focus on what is a tax code. A tax code will describe the following things. They are the tax type which is defined by running transaction OVK1 the tax amounts which are calculated or entered, the GL account for the tax posting. Then the calculation of extra taxes is done. This tax Calculation procedure will contain the following fields below. They are the steps which determine the sequences of the lines inside the procedure. Then we can take the condition types which will show the way the tax calculation model is working. Then there is the reference type which the system is obtaining the values or amounts and it will be used for the calculation process. Finally there is the account or process keys which has the ability to create a link among tax procedure and the GL Accounts to which the tax data are posted.    

When talking about the tax category, tax Category can be used for grouping and managing same product tax rates or else e tax rates associated with the sales. Tax Rates can be defined for every tax code. These tax rates are linked for the Tax types and they can be included in the tax procedures. The tax code is assigned for a Tax Procedure which will attach for a GL master record.

A particular tax procedure can be accessed in every situation where the GL account can be used in the processing of documents

Let’s see how to do this procedure in steps. Firstly you can run the transaction OVK3. Then after that, click on the New Entries button. Next you can enter the Tax Categories, class and description. Finally click on save button.

In order to define the tax types run transaction OVK1, then select New Entries button after that entering of Tax country or Sequence or the tax category can be done. Finally you can save those data.

Let’s see how to assign the plat for the determination of tax. Firstly run transaction OX10, after that click the New Entries button, then you can enter plant or the name1. Next enter the country code or the city code. Finally save the data.

When defining material taxes, you can run transaction OVK4, after that click the New Entries button, and then you can enter tax category or tax classification or the description. Next enter the country code or the city code. Finally save the data

When defining tax determination, first of all run transaction VK12; then enter the condition type; after that you can select domestic taxes. Next entering of country or customer tax class or else material tax class is done. Then you can run the report. Next enter the customer Tax class or material tax class or amount or else the period of validity and tax code. Finally save that tax record.