Tax Interface

Taxes 3.
0
Guide
SAP Tax Interface Configuration
Table of contents
Introduction
Overview...................................................................................................................................iii
Central Configuration
0.1
0.2
0.3
Basic Data Provided..................................................................................................vi

Basic Concepts: SD....................................................................................................vi
Basic Concepts: MM/FI.............................................................................................vii
1.0
Communication Configuration
1.1
Getting Started.............................................................................................................1
1.2
SAP and Tax Software Package reside on the same server.........................................3
1.3
SAP and Tax Software Package reside on different servers........................................4
1.4..............................................................................................Testing the connection
5
1.5
Assign external tax system to logical destination.......................................................8
2.0
Test Utilities
2.1
Test Jurisdiction Determination.......................................................... ...................10
2.2
Test Tax Calculation..................................................................................................14
3.0
3.1
Defining the tax jurisdiction code structure..............................................................21
3.2
Defining a tax procedure to a country......................................................................24
4.0
Tax Interface Configuration

4.1
Activate external tax calculation...............................................................................27
4.2
Activate external updating........................................................................................29
5.0
Customizing Master Data Tax Indicators (SD)

5.1
Tax by country configuration (SD)............................................................................31
5.2
Customer master configuration (SD)........................................................................33
5.3
Material master configuration (SD).........................................................................37
6.0
Customizing Master Data Tax Indicators (MM)

6.1
Material master configuration (MM)........................................................................41
6.2
Define tax classification indicators for plant (MM).................................................43
6.3
Assign tax classification indicators to plant (MM)...................................................44
6.4
Define tax classification indicators for account assignment (MM)..........................45
6.4
Assign tax classification indicators for account assignments (MM)........................46
7.0
Master Data Maintenance (SD)

7.1
Customer master maintenance (SD).........................................................................48
7.2
Material master maintenance (SD)...........................................................................56
7.3
Plant maintenance (SD).............................................................................................58
8.0
Master Data Maintenance (MM)

8.1
Assignment of jurisdiction to plant (MM)................................................................63
8.2
Assignment of jurisdiction to cost center (MM).......................................................64
8.3
Assignment of jurisdiction to vendor master (MM).................................................65
8.4
Assignment of A/P tax classification indicator to material master (MM)...............68
9.0
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Condition records
9.1
FI condition records..................................................................................................70
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9.2
9.3

9.1.1
Tax code condition record...........................................................................70
9.1.2
Tax code properties.....................................................................................71
9.1.3
Tax code condition record & properties maintenance (A/P)......................73
9.1.4
Mapping Product Code (A/P)..................................................................83
9.1.5
Tax code condition Record & Properties Maintenance (A/R)................. 84
9.1.6
Mapping Product Code (A/R).....................................................................89
SD condition records.................................................................................................90
MM condition records...............................................................................................94
9.3.1
Assign access sequence ton condition type NAVS.....................................94
9.3.2
Creating MM tax condition records...........................................................95
Appendix A:
Tax Interface Modification Upgrading to 3.0 Standard Tax Interface..............99
Appendix B:
General Ledger Accounts.....................................................................................102
Appendix C:
C.1
C.2
Calculate Taxes on Net Amount...........................................................................107

Based on User ID.....................................................................................................108
Based on Company Code/Region............................................................................110
Appendix D:
Calculate Discount On Net Base Amount............................................................113
Appendix E:
E.1
E.2
Update External Tax System Files.......................................................................114

Updating SAP tables TTXI and TTXY...................................................................115
Update utility programs...........................................................................................117
Appendix F:
F.1
F.2
F.3
Maintain condition elements (FI).........................................................................119

Condition types (FI)................................................................................................120
Access sequences (FI).............................................................................................134
Tax Procedure (FI)...................................................................................................137
Appendix G:
G.1
G.2
G.3
G.4
Control Data for Pricing (SD)..............................................................................142

Condition types (SD)...............................................................................................143
Access sequence (SD).............................................................................................148
Pricing Procedures (SD)..........................................................................................151
Relating Document Types to Procedures (SD)........................................................154
Appendix H:
H.1
H.2
H.3
Verify Account Processing Key Setup

Check and change settings for tax processing........................................................155
Define tax accounts.................................................................................................159
General Ledger Maintenance..................................................................................163
Appendix I:
Tax Only Adjustments...........................................................................................165
Appendix J:
User-Exit.................................................................................................................169
Appendix K:
Freight ...................................................................................................................179
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Document Overview
Introduction and General Information:
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As of 3.0 SAP offers three standard methods to compute US and Canadian sales and
use tax.
1. Standard SAP Sales & Use Tax Interface to 3rd party tax packages
(currently Taxware International and Vertex).
2. Standard SAP Jurisdictional Sales & Use Taxes
3. Standard SAP Non-Jurisdictional Sales & Use Taxes
The following document explains in detail the configuration steps which must be
performed within SAP release 3.0C and above when interfacing to an external tax system.
This document is intended for the use of all SAP consultants, pre-sales, customers and
third party consultants who will need to know how to configure SAP to calculate taxes
using the external tax interface.
This document does not explain how to configure the two other SAP tax methods listed
above. It is also not intended for SAP customers who are installing or who have installed
the 2.2 tax interface advance modification. A separate configuration document exists for
this (see 2.2 tax interface configuration guide located in Lotus Notes:
Support/Professional Services/FI/Taxes ). This document is solely intended for SAP
release 3.0C and above.
Please note that due to changes from release to release, certain functionality and/or
configuration steps may change. It is up to the customer to keep abreast of these
changes.
Background
In SAPs R/3 2.2 release an advance modification of SAPs tax API (Application
Programming Interface) was offered to provide our customers going live with 2.2 an
alternative tax solution. In SAPs release 3.0B and above, SAPs tax API is delivered
with the standard software.
Certification
In order for SAPs tax API to communicate with a third partys tax system, the third party
must develop an API which can communicate with SAPs API. Once this has been
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completed, the communication connection is tested between SAPs system and the third
party system. If the communication works correctly, then SAP will certify the third partys
connection. Please note: SAPs 3.0 tax interface certification was performed on an HP
UNIX operating system.
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Third Party Software & API

SAP provides a tax API which is capable of passing all needed data to an external tax
system to calculate taxes and determine tax jurisdictions, and then return these calculated
results back to SAP. This occurs during master data address maintenance to retrieve the
appropriate tax jurisdiction code, during order and invoice processing out of FI, MM, and
SD, to retrieve tax amounts, and during the execution of the update utility program which
updates the third partys software files with the appropriate tax information.
SAP does not deliver the certified partners software or API developed to communicate
with SAPs API. This software must be purchased and delivered from one of our certified
partners.
Prerequisites
In order for tax calculation to work utilizing an external tax package, the third party
software package must be installed at the customer site. In addition to this, the
appropriate version of SAPs certified tax partners API (Application Programming
Interface) must also be installed at the customer site. Our current certified partners are
Taxware International Inc. (formally AVP Systems) and Vertex Inc. Their APIs which
communicate with SAP are TaxwareLink and TransLink respectively.
In addition to the above, communications between SAP and the external tax package must
be established. Communications between SAP and the third party tax package is
established using SAP RFC (Remote Function Calls). The communication setup
configuration is explained in the following documents. Please note that although the
configuration within SAP in setting up the RFC call may seem straight forward, difficulties
in getting the communications to work during initial setup often arise. It is therefore
recommended that the customer have an experienced Basis person to assist with this
initial setup.
Important Note
SAP is under no obligation to install 3rd party packaged software, or their corresponding
certified API. This is the full responsibility on the 3rd party software vendor. If during
the installation of the third partys API, problems have been detected with SAPs RFC
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libraries, then these problems should be directed to and resolved by SAP.

SAP will assist our customers with communication setup and testing from within SAP as
well as application configuration upon customer request. This will only be done after the
third partys standard software, as well as their software needed to communicate with SAP
has been properly installed and tested. Any problems our customers have with installing
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third party software should be directed to and resolved by the appropriate software
vendor.
SAP is under no obligation to provide consulting, setup, or maintenance of a third party
software package. If customers have post installation questions, problems, or
maintenance issues which pertain specifically to the third partys software package, then
these questions should be directed to and resolved by the appropriate software vendor.
SAP is also under no obligation to provide post implementation consulting for third party
software packages.
User-Exits
SAP provides a customer user-exit to handle customer specific and partner specific
functionality. Any ABAP code added to this user-exit to manipulate SAP functionality or
pass unique values to the third party package is considered a customer modification and is
not supported by SAP hotline. The most common user-exit examples related to taxes are
provided within this document. If a customer would like assistance from SAP to define
their specific tax requirements, establish resolutions to these requirements, and/or to
provide ABAP programming logic to the user-exit, they should direct these issues to their
SAP contact person. SAPs assistance and setup is considered consulting and will be
billed to the customer accordingly.
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0.1
Basic Data Provided:
When delivered, the system should be loaded with Tax Procedures TAXUSX along with
all necessary condition types. If not, then the appendices and the configuration guide
presented here should aid you to set it up.
0.2
Basic Concepts: SD
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SD requires that sales orders and invoices reflect the tax applicability of each item and
compute the total tax due on each line item within the sales document. Appropriate tax
amounts are determined for both orders and invoices based on the delivering country
(origin), the region (state, province) of the ship-to address, the tax class of the ship-to
partner, the tax class of the material being shipped, the posting date, and the jurisdiction of
the customer and the plant. Taxes are calculated based on the ship-to partner destination,
but other factors can influence the tax amount. The ship-from destination (plant), as well
as the point of order acceptance, and the point of order origin (Taxware only). Please note
that SAP defaults the ship-from jurisdiction maintained on the plant as the point of order
acceptance, and defaults the ship-to jurisdiction maintained on the customer as the point of
order origin. Order acceptance jurisdiction and order origin jurisdiction can be changed
using the provided tax interface user-exit.
Jurisdiction codes are automatically retrieved from the external tax package during
creation or change of a customer master record or a plant. This occurs after the address
information has been entered on the master data.
SD uses the country, region (state, province), customer tax classification indicator, and
material tax classification indicator to read the tax condition records. In pricing the sales
order, the system exits the normal pricing upon recognizing a condition type 1 (UTXJ,
as delivered). The tax condition records are then read using the country and tax code
maintained in the pricing condition record. The tax procedure and the SD pricing
procedure contain condition formulas (300 - 306) which invoke SAPs tax interface API.
Once SAPs API is invoked, a data structure is filled with the necessary information
needed by our partners tax package to calculate taxes. This data structure is then passed
to our partners API via an RFC (remote function call). The partners API passes this
data to its tax calculation package. The appropriate tax is calculated and returned back to
the partners API., and then onto SAPs API. These tax amounts and rates are applied to
the SD documents pricing at each of up to six levels of jurisdiction denoted by the
Condition Types (e.g. XR1..XR6).
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0.3
Basic Concepts: MM/FI:A/P
MM/FI provides that for each line of the purchase order (PO) created or invoice entered,
the sales or use tax can be computed by the system. This means the system needs to know
where taxes are being charged. A ship-to tax jurisdiction code must be maintained. This
jurisdiction code can reside on the plant, cost center, asset master, internal order, or
project (WBS). If no jurisdiction code is maintained on the asset, order, or project, then
the jurisdiction code of the responsible cost center maintained on the asset, order, or
project will default into the purchase order or invoice verification document at the at time
of document creation. This jurisdiction code will be used as the ship-to tax destination.
In addition to the ship-to destination (plant, cost center, etc.), taxability is also influenced
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by the ship-from destination. A jurisdiction code can be maintained within the vendor
master record. This jurisdiction code will be used as the ship-from tax destination.
Jurisdiction codes are automatically retrieved from the external tax package during
creation or change of a plant, cost center, or vendor master record. This occurs after the
address information has been entered on the master data. For an asset, internal order, and
project one may select PF4 (possible entries) on the jurisdiction code field, and return a
list of valid jurisdictions from the external tax system to choose from.
MM & FI, use country and tax code to read the tax condition records. The tax procedure
TAXUSX contains condition formulas (300 - 306, 311-316) which invoke the tax interface
API. Once the API is invoked a data structure is filled with the necessary data needed by
our partner tax packages to calculate taxes. This data structure is passed to our tax
interface partners API via RFC (remote function call). The tax partner API passes this
data to the tax calculation package, which in return passes the tax data back to the API.
The tax partner API then passes this information back to SAPs API onward to MM/FI.
Tax amounts and statistical rates apply to each of up to six levels of jurisdiction denoted
by the Condition Types (e.g. XP1E..XP6E, XP1I..XP6I, XP1U..XP6U).
Each GL account and cost element has a tax category field with a variety of settings.
Output is for SD/AR. Input is for MM/AP. Blank is for accounts not applicable like
cash or accumulated depreciation accounts. Typical accounts designated as requiring
output taxes include revenue accounts and trade receivables. Input taxes requires would
be found on trade accounts payable and primary cost elements that are normally taxable
(small tools, material consumed). In the USA, component inventory is not taxable but in
Canada, it is usually partially taxable (GST).
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1.0
Communication Configuration
1.1
Getting Started
A RFC destination must be created which specifies the type of communication

and the directory of the executable program.
IMG Path:
Financial accounting>Finaancial accounting global

settings>Taxes on sales/purchases>Basic
settings>External tax
calculation>Define physical
destination
Transaction: SM59
The destination must be setup as a TCP/IP communication protocol.
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1.1
Getting Started
The destination name is user defined. In the following examples the destination name for
Taxware is AVP, and the destination name for Vertex is VERTEX.
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1.2
SAP and Tax Software Package reside on the same server
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In the above example SAP and the external tax package reside on the same server. Notice
that in this case Application Server should be selected as the program location.
In the field Program, the external tax packages executable or shell script program along
with the directory path in which it was installed, must be specified.
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1.3
SAP and Tax Software Package reside on different servers
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In the above example, SAP and the external tax package reside on different servers. This
would be an explicit communication setup. Explicit host should be selected as the
program location. For explicit communication setups, the host name of the server where
the tax package software resides must be defined within the field Target machine.
In the field Program, the external tax packages executable or shell script program along
with the directory path in which it was installed, must be specified.
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1.3
Testing the connection
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In order to test the connection between SAP and the external tax package, depress
the Test connection button in the upper left hand corner of the screen.
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1.3
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If a screen similar to the one above appears, the communication is working correctly.
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1.3
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If a screen similar to the one listed above appears, then there is something wrong with the
communication setup.
If the above occurs, check to see:
1. The connection type is TCP/IP.
2. Program location and host name are correctly specified.
3. The directory path and the name of the executable program are correct.
4. Third party tax package has been installed correctly and is the correct
version .
5. Third partys API for SAP tax interface is installed correctly and is the
correct version.
6. SAP RFC libraries are correct version.
7. The correct permissions are set for user account.
8. Check user has read/write authority.
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1.4
Assign external tax system to logical destination.
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IMG Path:
Financial accounting>Financial accounting global settings>Tax

on sales/purchases>Basic settings>External tax calculation>
Define logical destination
Table: TTXC
Ex:
A = Taxware
V = Vertex
Event:
JUR = Jurisdiction determination

TAX = Tax calculation
UPD = Update tax package audit/register files
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1.4
Assign external tax system to logical destination.
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Function Module:
RFC_DETERMINE_JURISDICTION = jurisdiction determination

RFC_CALCULATE_TAXES = tax calculation & update
RFC destination:
Name of destination setup in SM59, i.e. AVP / VERTEX.
Please note that the RFC function modules listed above are delivered with SAP. Check to
see if they exist via transaction SE37.
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2.0
Test Utilities
2.1
Test Jurisdiction Determination

Menu Path:
Tools>ABAP/4 Workbench>Function Library>Test
Transaction:
SE37
RFC Function Module: RFC_DETERMINE_JURISDICTION
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2.1
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Specify the RFC destination in the field RFC target system. Please note that this must
be entered using uppercase letters.
Double click on LOCATION_DATA located under Import Parameters. A pop-up
window should appear in which you can enter test data.
Minimum data which must be entered for jurisdiction determination is region (state,
province) and postal code (zipcode).
After entering the test data and the RFC destination go to
Function Module>Execute
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2.1
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After executing the function module you should receive a screen similar to the one shown
above.
To view the results double click on LOCATION_RESULTS under Tables. To view
messages double click on LOCATION_ERR under Export parameters.
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2.1
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The jurisdiction results will differ depending on the tax software package being used.
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2.2
Test Tax Calculation

Menu Path:
Tools>ABAP/4 Workbench>Function Library>Test
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Transaction:
SE37
RFC Function Module: RFC_CALCULATE_TAXES
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2.2
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Specify the RFC destination in the field RFC target system. Please note that this must
be entered using uppercase letters.
Double click on TAX_DATA located under Import Parameters. A pop-up window
should appear in which you can enter test data.
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2.2

Minimum data which must be entered for tax calculation:
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Taxware:
Ship-to jurisdiction (TXJCD_ST)

Ship-from jurisdiction (TXJCD_SF)
Point of order acceptance jurisdiction (TXJCD_POA)
Point of order origin jurisdiction (TXJCD_POO)
Length of first jurisdiction level (TXJCD_L1)
Length of second jurisdiction level (TXJCD_L2)
Length of third jurisdiction level (TXJCD_L3)
Length of fourth jurisdiction level (TXJCD_L4)
Taxable amount (AMOUNT)
Vertex:
Ship-to jurisdiction (TXJCD_ST)

Taxable amount (AMOUNT)
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2.2
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2.2
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When entering in taxable amount add two additional zeros to take into consideration two
decimal places. For example 10000 is actually 100.00.
The quantity field has an implied 3 decimal places. When entering the quantity, three
additional zeros must be added. For example 10000 is actually 10.000.
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2.2
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Tax calculation results may vary depending upon external tax package being utilized.
After executing the function module you should receive a screen similar to the one shown
above.
To view the results double click on TAX_RESULT under Export parameters. To view
messages double click on TAX_ERR under Export parameters.
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3.0
3.1
3.2
Defining the tax jurisdiction code structure

Defining a tax procedure to a country
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3.1

IMG Path:
Financial accounting>Financial accounting global

settings>Tax on sales/purchases>Basic Settings>
Specify structure for tax jurisdiction code
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Transaction:
OBCO
Table:
TTXD
Taxware tax structure
Add entry TAXUSX (enter Taxware = 2,5,2 or Vertex = 2,3,4,1).
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3.1
Indicator: Determine taxes by line item (Tx In)

When this indicator is set, taxes are calculated on a line-by-line basis. A cumulative tax
amount based on tax code and jurisdiction would not apply here. Since multiple tax items
can be created for each line item, and internal processing only allows for up to 999 line
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items, the maximum number of line items per document is, in effect, reduced, compared to
the total number of lines allowed when line-by-line tax calculation is not activated.
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4.0
Tax Interface Configuration

4.1
4.2
Activate external tax calculation

Activate external updating
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4.1
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IMG Path:
Financial Accounting>Financial accounting global settings>

Tax on sales/purchases>Basic settings>External tax
calculation>Activate external tax calculation
Table view:
V_TXD_E
Taxware
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4.1
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Vertex
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4.2
Activate external updating
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IMG Path:
Financial Accounting>Financial accounting global

settings>Taxes on sales/purchases>Basic Settings>
External tax calculation>Activate external updating
Table:
TRWCA
Setting this flag will cause tables TTXI and TTXY, header and item tax data respectively,
to be updated with the information returned by the external tax system. Program
RFYTXU00 reads against this table to update the external tax systems files with the
appropriate data.
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5.0
Customizing Master Data Tax Indicators (SD)

Here the setup necessary for the system to derive tax code from material and
customer master file tax classifications will be explained. First the tax indicators
need to be defined for the country. Then in the configuration of the customer and
material master files. Finally the tax classifications can be entered in the master
files themselves. These indicators will be used to automatically determine the tax
code in SD via pricing condition records.
5.1
5.2
5.3
Tax by country configuration (SD)

Customer master configuration (SD)
Material master configuration (SD)
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5.1
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This configuration sets up the options for the customer master and material master.
It is a check table for tax category and country relationship.
IMG Path:
Sales and Distribution>Basic functions>Tax determination>

Define tax determination rules>Define tax types for each
country
Transaction:
OVK1
Table:
TSTL
Tax category UTXJ must be maintained using a sequence of 1 for the U.S.
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5.1
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Tax category CTXJ must be maintained using a sequence of 1 for Canada..

Note: Users may want to delete entries UTX2, CTX2, UTX3, CTX3 to suppress them
from display on the customer master taxes view.
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5.2

This configuration defines the possible tax classifications for the tax category in the
customer master on the billing screen.
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IMG Path:
Sales and Distribution>Basic functions>Tax

determination>Define tax relevancy of master
records>Customer taxes
Transaction:
OVK3
Table:
TSKD
Here the user defined customer tax classification indicators are defined based upon tax
category UTXJ for the U.S.
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5.2
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Here the user defined customer tax classification indicators are defined based upon tax
category CTXJ for Canada.
The customer tax classification indicator is used as a key in automatically determining the
tax code within SD. If all tax exemption handling is done by the external tax system, then
a special classification indicator for exemptions would not be needed.
SAPs tax exemption handling is beneficial in reducing system performance time because it
reduces the amount of calls made to the external tax system. However, when utilizing this
functionality, keep in mind that no detail updating is possible to the third party packages
files. SAPs logic will check the data calculated during FI posting to what is
being recalculated during update to the external tax systems files. Since the tax
calculation never occurred during FI posting because the call to the tax system was
bypassed, update will fail with an error message indicating that the previously calculated
data differs from the data which is being recalculated.
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5.2
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The only way to pass data over to the tax system in this situation is to force it over in
summary with no recalculation. If the external tax systems files are not being updated for
reporting purposes than this is a non issue.
If all tax reporting is being handled within SAP, then it may be beneficial to handle tax
exemptions within SAP.
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5.2

Menu Path: Logistics>Sales/distribution>Sales>Order/Inquiry/Quotation>
Create/Change
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Transaction: VA01/VA02
VA11/VA12
VA21/VA22
Sales Order
Sales Inquiry
Sales Quotation
The customer tax classification indicator can be overwritten during sales order entry.
Within sales order goto Header>Business Data, under Billing data select the green
arrow for additional information, field name is Alt. tax classific. (see above)
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5.3

IMG Path:
Sales and Distribution>Basic functions>Tax determination>

Define tax relevancy of master records>Material taxes
Transaction:
OVK4
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Table:
TSKM
Here the user defined A/R material tax classification indicators are defined based upon
tax category UTXJ for the U.S. and tax category CTXJ for Canada..
The A/R material tax classification indicator is used as a key to automatically determine
the tax code within sales. Multiple tax classifications may need to be set up for special tax
rules and regulations based on material. These tax classification indicators are user
defined, and point to user defined tax codes maintained via transaction FTXP.
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5.3
In the above example tax classification 0 represents an exempt material or service which
points to a tax code of say O0. Tax classification 1 represents a standard product which
points to a tax code of say O1. Tax classification 2 represents a service which points to a
tax code of say O2. Tax classification 3 represents a rental/lease which points to a tax
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code of say O3. Tax classification 4 points to a tax code of say O4 which represents a
Taxware product code 12000 for consulting services. Tax classification 5 points to a tax
code of say O5 which represents a user defined product code of 9937299.
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5.3

Menu Path: Logistics>Sales/distribution>Sales>Order/Inquiry/Quotation>
Create/Change
Transaction: VA01/VA02
VA11/VA12
VA21/VA22
Sales Order
Sales Inquiry
Sales Quotation
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The material tax classification indicator can be overwritten during sales order entry.
Within sales order goto Item>Business Data, under Billing data select the green arrow
for additional information, field name is Tax classification. (see above)
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6.0
Customizing Master Data Tax Indicators (MM)

Here is the necessary setup for the system to automatically derive tax code from
material, plant and account assignment for MM transactions. As with SD master
data configuration, tax classification indicators must be maintained to
automatically determine the tax codes.
When creating a purchase document the tax code will be automatically determined
based on the configuration described below. The tax code can be overwritten
within the purchase order (item details) and invoice verification document.
6.1
6.2
6.3
6.4
6.5
Material master configuration (MM)

Define tax classification indicators for plant (MM)
Assign tax classification indicators to plant (MM)
Define tax classification indicators for account assignment (MM)
Assign tax classification indicators for account assignments (MM)
6.1
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IMG Path:
Materials Management>Purchasing>Taxes>
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Set tax indicator for material

Transaction:
OMKK
Table:
TMKM1
Here the A/P material tax classification indicators are set.

The A/P material tax classification indicator is used as a key to automatically determine
the tax code within purchasing. Multiple tax classifications may need to be set up for
special tax rules and regulations based on material. These tax classification indicators are
user defined, and point to user defined tax codes maintained via transaction FTXP.
In the above example tax classification 0 represents an exempt material or service which
points to a tax code of say I0. Tax classification 1 represents a standard product which
points to a tax code of say I1. Tax classification 2 represents a service which points to a
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6.1
tax code of say I2. Tax classification 3 represents a rental/lease which points to a tax
Taxes 3.0
Guide
code defined as I3. Tax classification 4 points to a tax code of say U1 which represents
A/P consumer use tax. Tax classification 5 points to a tax code of say I4 which represents
a Taxware product code of 52000 for insurance. Tax classification 6 points to a tax code
of say I5 which represents a user defined product code 9937299.
Page 42
6.2
Define tax classification indicators for plant (MM)

IMG Path:
Set tax indicator for plant
Transaction:
OMKM
Taxes 3.0
Guide
Table:
TMKW1
Above the MM plant tax classification indicators are defined.
Page 43
6.3
Assign tax classification indicators to plant (MM)

IMG Path:
Assign tax indicators for plants
Transaction:
OMKN
Table:
T001W
Taxes 3.0
Guide
Above U.S. plants are assigned a classification indicator. Please note that this step is not
mandatory. This step is only necessary if plant will be used to automatically determine
the tax code on MM documents.
Page 44
6.4
Define tax classification indicators for account assignment (MM)

IMG Path:
Set tax indicator for account assignment
Transaction:
OMKL
Table:
TMKK1
Taxes 3.0
Guide
Above the MM account assignment tax classification indicators are defined.
Page 45
6.5
Assign tax classification indicators for account assignments (MM)

IMG Path:
Assign tax indicators for account assignments
Transaction:
OMKO
Table:
T163KS
Taxes 3.0
Guide
Above account assignments are assigned a classification indicator. Please note that this
step is not mandatory. This step is only necessary if account assignments will be used to
automatically determine the tax code on MM documents.
Page 46
Taxes 3.0
Guide
7.0
Master Data Maintenance (SD)

Master data maintenance for taxes is necessary. The customer master must
contain the jurisdiction code for taxation location, and the customer tax
classification indicator to automatically determine the tax code. The plant must
contain a jurisdiction code representing the ship-from location. The material
master record must contain a material tax classification indicator to automatically
determine the tax code.
7.1
7.2
7.3
Customer master maintenance (SD)

Material master maintenance (SD)
Plant data maintenance (SD)
Page 47
7.0
Taxes 3.0
Guide
It is necessary to link the customer master file with the tax classification that
indicate the applicability of taxes for the customer. Normally this would mean
retail customer (taxable) or wholesale customer (non-taxable). But other
classifications may apply as well. This tax classification indicator is recorded on
the billing data screen of the customer master file. This tax classification indicator
is used within the SD condition record to automatically select the tax code. The
tax jurisdiction code of the ship-to partner is automatically determined and added
on the control data screen based upon the address information entered on the
previous screen.
Menu Path:
Logistics>Sales & Distribution>Master Data>Business Partner>

Sold-to Party>Create/Change>Create/Change
Transaction:
V-03 or centrally V-09 create

VD02 or centrally XD02 change
Screens: Address, Control data & Billing
Page 48
7.1
Taxes 3.0
Guide
Customer master change initial screen
Page 49
7.1
Taxes 3.0
Guide
Check to make sure the appropriate fields are populated. The minimum data required to
automatically determine the jurisdiction code is the country (U.S. or Canada), the postal
code (zipcode), and the region (state or province).
Page 50
7.1
Keep in mind that the more data sent over to the third party tax system for jurisdiction
code determination, the more likely a direct hit can be found. When loading master data in
Taxes 3.0
Guide
batch, it is recommended to send the County (District) in addition to the State (Region),
and Zip code (Postal code) if at all possible. This increases the possibility of returning a
single jurisdiction code. When multiple jurisdictions are found based on the data being
passed to the external tax system, a pop-up window will display the State, County, City in
which the appropriate selection can be made (shown below). However, in batch
processing there is no way to automatically make this selection if multiple jurisdictions are
found. Therefore the jurisdiction code will not be updated within the master data record.
The user would then have to go back and change the master records on-line to select and
update jurisdiction code within the master record.
Page 51
7.1
Taxes 3.0
Guide
In this example for Broomfield, Colorado using multiple jurisdiction codes exist based
upon the address information entered. The user can make the appropriate selection based
on the city or district. Notice that if a County (District) were specified, a direct find
would have occurred.
Note: Even when a State (Region), County (District), and City are all correctly entered
multiple jurisdiction codes may still be returned. This can be due for example to different
vanity names being used or a company using a city as their address even though they
dont officially reside in that city.
Page 52
7.1
Taxes 3.0
Guide
After selection has been made a message will appear indicating the address data has
been supplemented using the external tax system.
Page 53
7.1
Taxes 3.0
Guide
Jurisdiction code will automatically default to control data screen. Please note that
jurisdiction codes will vary based on external tax system being used.
Page 54
7.1
Taxes 3.0
Guide
Tax classification indicator must be maintained on billing screen.
Page 55
7.2

Menu Path:
Logistics>Sales & Distribution>Master Data>Products>
Taxes 3.0
Guide
Material>{select one e.g. trading goods>{select view=sales 2}>

Create/Change
Transaction:
MM01
MM02
create
change
Screens:
Sales 2 data
Change material master record: initial screen
Page 56
7.2
Taxes 3.0
Guide
Material tax classification must be maintained on the Sales 2 screen.
Page 57
7.3
Plant maintenance (SD)

It is necessary to maintain the jurisdiction code on the plant in order to send to the
external tax system the ship-from destination in A/R (ship-to destination in A/P).
Taxes 3.0
Guide
The address information must first be maintained for the plant.

IMG Path:
Corporate structure>Definition>Logistics general>Create plant>

Details
Transaction:
OX10
Maintain plant address data
Page 58
7.3

It is necessary to maintain the jurisdiction code on the plant in order to send to the
external tax system the ship-from destination in A/R (ship-to destination in A/P).
The address information must first be maintained for the plant.
Taxes 3.0
Guide
IMG Path:
Materials Management>Purchasing>Environment data>Define

tax jurisdiction
Transaction:
OMGJ
Every time transaction OMGJ is executed a re-determination of plant jurisdiction will

occur for all plants which reside within a country configured to use the interface. A
message log similar to the one shown above will display any needed messages. If a
jurisdiction could not be found due to invalid address information, this data must be
corrected via transaction OX10. If a jurisdiction cannot be found unambiguously, then
the appropriate selection must be made manually.
Page 59
7.3
Taxes 3.0
Guide
If only one jurisdiction exists based upon the address information maintain for the plant,
then the jurisdiction code will be automatically populated. If multiple tax jurisdictions
exist based upon the address information passed to the external tax system then a message
will appear: Jurisdiction code cannot be determined unambiguously for plant xxxx. In
this situation the Re-assign code button must be depressed to obtain a pop-up window
in which you can make your selection.
If the external tax system in unable to determine a jurisdiction based upon the address
information maintained for the plant then the following message will appear: Jurisdiction
code cannot be determined for plant xxxx. In this situation it would be necessary to go
back to transaction OX10 and verify if the address information is correct.
Page 60
7.3
Plant Maintenance (SD)
Taxes 3.0
Guide
Please note jurisdiction codes vary depending on the external tax system being used.
Page 61
Taxes 3.0
Guide
8.0
Master Data Maintenance (MM)

Accounts payable master data must also be maintained if taxes are to be determine
during the procurement of goods or services out of MM or FI.
8.1
8.2
8.3
8.4
Assignment of jurisdiction to plant (MM)

Assignment of jurisdiction to cost center (MM)
Assignment of jurisdiction to vendor master (MM)
Assignment of A/P tax classification indicator to material master (MM)
Page 62
8.1
Assignment of jurisdiction to plant
Taxes 3.0
Guide
This is necessary to determine the ship-to jurisdiction for all A/P transactions.
The setup for doing this is the same as for SD.
Page 63
8.2
Assignment of jurisdiction to cost center

This is necessary when the ship-to jurisdiction is based upon the location of the
cost center.
Taxes 3.0
Guide
Menu Path: Accounting>controlling>Cost centers>Master data>Cost

center>Create/Change
Transaction:
KS01/KS02
The jurisdiction codes will differ depending upon the external tax system being used.
While in create/change cost center depress Address button to maintain cost center
address information. The jurisdiction code will be populated automatically.
Page 64
8.3
Assignment of jurisdiction to vendor master

Menu path: Logistics>Materials Management>Purchasing>Master Data
Purchasing>Vendor>Create/Change
Taxes 3.0
Guide
Transaction:
MK01/MK02
Vendor master initial screen
Page 65
8.3
Taxes 3.0
Guide
If valid address information is entered, the jurisdiction code will automatically be

determined by external tax system and returned to SAP.
Page 66
8.3
Taxes 3.0
Guide
The jurisdiction codes will differ based on external tax system being used
Jurisdiction code is stored on control data screen.
Page 67
8.4
Assignment of A/P tax classification indicator to material master

Menu Path: Logistics>Sales & Distribution>Master Data>Products>
Material>{select one e.g. trading goods}>
Taxes 3.0
Guide
{select view=purchasing}>Create/Change
Transaction: MM01 create
MM02 change
Screens:
Purchasing
MM tax classification indicator is maintained on Purchasing Screen of material master

record.
Page 68
Taxes 3.0
Guide
9.0
Condition records
There are three types of condition records that exist in tax determination. Tax
condition records created in FI, SD, and MM.
The FI tax condition records are based on the tax code and are created in
customizing. There will be as many tax condition records created for all tax codes
used for A/R sales & use tax , A/P sales tax, and A/P self-assessment use tax
where the tax user sells or consumes taxable goods & services. This is the central
configuration for tax code condition record maintenance.
The tax condition records created in SD are based upon condition type UTXJ for
the U.S. and condition type CTXJ for Canada. The SD condition records pick up
a valid tax code, which are used to read the tax condition records set up in FI.
These condition records are mandatory for SD tax determination.
A tax condition record can also be created within MM. This is not mandatory but
it is necessary to automatically determine the tax code. This condition record is
based upon condition type NAVS and access sequence 0003.
9.1
9.2
9.3
FI condition records
SD condition records
MM condition records
Page 69
9.1
FI Condition Records
9.1.1 Tax code condition record
Taxes 3.0
Guide
IMG path:
Financial Accounting>Fianancail accounting global

settings>Taxes on sales/purchases>Calculation>Define
taxes on sales/purchase codes
Transaction:
FTXP
Table:
A003
Tax code condition records are stored in condition table A003. The country of
the plants company along with the tax code which was determined automatically
from the SD/MM condition records (see section 9.2/9.3) are used to read the tax
condition records stored in table A003. Note: the tax code can also be entered
and changed manually in MM and FI.
Percentage rates for the tax jurisdictions are then entered. For tax codes which are
greater than 0% (i.e. I1,U1, O1) enter 100% for appropriate Sales tax condition
types (XP1E, XP2E, XP3E, XP4E, XP5E, XP6E or XP1I, XP2I, XP3I, XP4I,
XP5I, XP6I or XR1, XR2, XR3, XR4, XR5, XR6). Enter minus 100% for Use
tax condition types (XP1U, XP2U, XP3U, XP4U, XP5U, XP6U). For 0% tax
codes (ie. I0, O0) enter 0% rather than 100%.
When creating a new tax code condition record, after specifying the country, a
pop-up window will display where the tax code properties are maintained (see
section 9.1.3). These tax code properties are stored in T007A under the key
fields tax procedure(KALSM) and tax code(MWSKZ).
Page70
9.1.2 Tax code properties

IMG path:

Taxes on sales/purchases>Calculation>Define taxes on
sales/purchase codes
Taxes 3.0
Guide
Transaction:
FTXP
Table:
T007A
DO NOT USE SM31(UPDATE) to maintain T007A, as links to other tables will

not be properly maintained. Follow the menu path or use transaction FTXP. The
table may be reviewed with SM31, Display mode only!
Purpose: To define the allowable combination of tax procedure with tax code and
tax type. This table will be checked later when creating condition records for tax
jurisdiction codes.
The Relevant to tax, Tax Category, and Product Code fields contain values which
are passed to the external tax system.
To add new Tax codes as shown below, input the new code, then a window
to enter the tax codes properties will pop-up, then enter:
1. Tax code title
2. Tax code type
V input (A/P, MM)
A output (A/R, SD)
3. Check
the error message indicator (blank means warning) for calculated versus
entered tax amounts. Setting the radio button means an error message
will be given.
4. EC code
Not relevant for tax interface
5. Target tax code
Not relevant for tax interface
Page 71
9.1.2 Tax code properties

6. Relevant to tax:
Blank or 0 = Taxability determined from external tax
package
1
= Used to override tax exemptions set up in
external tax system if being utilized.
Taxes 3.0
Guide
= Not relevant to taxation, does not access

external tax package
7. Tax Category:
Blank or 0
= Normal Sales Tax
1
= Consumer Use Tax (Set this for A/P self
assessment taxes)
2
= Service Tax
3
= Rental/Lease Tax
8. Product Code:
Used to map to external tax systems product code.
Please note that table TTXP must also be maintained.
Page 72
9.1.3 Tax code condition record & properties maintenance (A/P)

IMG path:

Taxes on sales/purchases>Calculation>Define taxes on
sales/purchase codes
Transaction:
FTXP
Taxes 3.0
Guide
Select country U.S.
Page 73

A/P Consumer Use Tax
Taxes 3.0
Guide
Positive (100%) must be entered as the tax rate for condition types XP1I-XP6I. Notice
that the tax category set up in properties is set to 1 to calculate consumer use tax.
Page 74
Taxes 3.0
Guide
A/P Consumer Use Tax (cont.)

Negative
(100-%) is entered for condition types (XP1U..XP6U) to force credit entry to

the tax liability accounts. Enter tax accounts associated to the appropriate process key.
Page 75
Taxes 3.0
Guide
Select country Canada
Page 76

A/P Sales Tax - Canada
Taxes 3.0
Guide
A/P Sales Tax condition record for Canada
Page 77
A/P Tax Exempt
Taxes 3.0
Guide
For A/P tax exempt condition records, 0% is entered for condition types XP1I-XP6I.
After the enter key is depressed the 0% values entered disappear, however,
the lines will become highlighted indicating that they are active. Notice in the properties
window the Relevant to tax indicator is set to 2. This will prevent the tax interface
from being accessed which will save processing time. If the external tax system is being
used to handle tax exemptions, then this indicator must be set to space or 0. This is
because the call must be made to the external tax system to access their exemption
handling.
Page 78

A/P Sales Tax - U.S.A
Taxes 3.0
Guide
For A/P sales tax conditions no tax accounts are specified because the taxes are distributed
to the inventory account. Tax rates of 100% must be maintained for condition types
XP1I-XP6I.
Page 79
9.1.3 Tax code condition record & properties maintenance

A/P Sales Tax for Rental/Lease
Taxes 3.0
Guide
Tax category field is set to 3 for rental/lease. This value is passed to the external tax
system to determine the appropriate tax.
Page 80

A/P Sales Tax for Product code
Taxes 3.0
Guide
In the above example the tax code is linked to a product code. The product code can then
be mapped to the external tax systems product code via table TTXP.
Page 81
9.1.4 Mapping Product Code (A/P)

Transaction:
SM31
Table:
TTXP
View: V_TTXP
Taxes 3.0
Guide
View Maintenance
Ext. tax ID:
A = Taxware
V = Vertex
Prod. code:
SAP user defined product code
Ext .prd. cd: External tax system product code

Text:
Description (user defined)
Page 82
9.1.5 Tax code condition record & properties maintenance (A/R)

IMG path:
A/R Tax Exempt
Financial Accounting>Financial accounting global settings>Tax

on sales/purchases>Calculation>Define taxes on sales/purchase
codes
Taxes 3.0
Guide
For A/R tax exempt condition types XR1-XR6 must be maintained with 0% rate. Setting
the Relevant to tax indicator to 2 will bypass the call to the external tax system. If
handling tax exemptions within the third party tax system, then this indicator must be set
to 0 or space.
Page 83

A/R Sales Tax - U.S.A
Taxes 3.0
Guide
For A/R sale tax condition types XR1-XR6 must be maintained with 100% rate.
Page 84

A/R Sales Tax - U.S.A.
Taxes 3.0
Guide
Page 85

A/R Sales Tax - Canada
Taxes 3.0
Guide
Page 86

A/R Sales Tax (service)
Taxes 3.0
Guide
Tax Category is set to 2 for service tax.
Page 87

A/R Sales Tax for Product code
Taxes 3.0
Guide
In the above example user defined product code 9937299 is maintained for this tax code.
Page 88
9.1.6 Mapping Product Code (A/R)

Transaction: SM31
Table:
TTXP
View:
V_TTXP
Taxes 3.0
Guide
View Maintenance
Ext. tax ID:
A = Taxware
V = Vertex
Prod. code:
SAP user defined product code
Ext .prd. cd: External tax system product code

Text:
Description (user defined)
Page 89
9.2
It is necessary to create a condition record for all State, Customer tax
classification, and material tax classification combinations being used. This is
the final step in setting up SD and it is important! Here you go through each
state (region) and match relevant customer tax classifications and material tax
Taxes 3.0
Guide
classifications to the corresponding tax code. This tax code corresponds to the tax
code condition records set up in FI.
The tax condition records are stored using the tax code. When the tax code is
automatically determined in SD is will be used (along with the country) to read
against the appropriate tax condition records which have been maintained in FI.
The tax code properties will contain important information which is relevant to
taxation. This includes external product code, tax relevant indicator, and the tax
type. This information along with the jurisdiction on the ship-to address of the
customer, and the jurisdiction on the ship-from address on the plant, the taxable
amount, as well as several other fields will be passed to the external tax package to
determine the appropriate tax amount per line item.
Exemptions within SAP must be represented and given a tax code. The entry for
that code in the FI setup will have a rate of 0.0. The exception to this, is if tax
exemptions are being handled by the external tax system.
Page 90
9.2
Menu Path:
Logistics>Sales/distribution>Master data>Prices>Taxes>
Create/Change
Transaction:
VK11/VK12
Taxes 3.0
Guide
Select condition type UTXJ to maintain U.S. condition records. Select condition type
CTXJ to maintain Canada condition records.
Page 91
9.2
Taxes 3.0
Guide
U.S. condition records using UTXJ

The above is a list of condition records set up using the key values of state, customer
classification indicator, and material classification indicator, which point to a tax code.
Enter the combination for all country, region, and tax classification indicators and map to
the appropriate FI tax code.
Page 92
9.2
Taxes 3.0
Guide
Canada condition records using CTXJ

The above is a list of condition records set up using the key values of state, customer
classification indicator, and material classification indicator, which point to a tax code.
Enter the combination for all country, region, and tax classification indicators and map to
the appropriate FI tax code.
Page 93
9.3
MM condition records
9.3.1 Assign access sequence to condition type NAVS
Taxes 3.0
Guide
IMG Path:
Materials management>Purchasing>Conditions>Conditions
for purchase of materials>Define price determination
process->Define condition types
Transaction:
M/06
Access sequence added to condition type NAVS.

Select condition type NAVS and assign access sequence 0003 to it. Please note that this
step is only necessary to automatically determine the tax code. Tax code can also be
added or changed manually in MM processing.
Page 94
9.3.2 Creating MM tax condition records

Menu Path:
Logistics>Materials management>Purchasing>Master
Taxes 3.0
Guide
data>Taxes>Create/Change
Transaction:
MEK1/MEK2
Select the condition type NAVS.
In this example condition table based on material is selected.
Page 95

Classification indicators based on Import and Region are hard coded.
Import (TAXIL)
Taxes 3.0
Guide
0=
1=
2=
Domestic purchase
Intercompany purchase
EC intercompany purchase
Region (TAXIR)
0=
Intrastate purchase
1=
Interstate purchase
Page 96
Taxes 3.0
Guide
U.S. condition records using NAVS
Tax codes maintained per country and material classification indicators.
Page 97
Taxes 3.0
Guide
Canada condition records using NAVS
Tax codes maintained per country and material classification indicators.
Page 98
Taxes 3.0
Guide
Appendix A:
2.2 Tax Interface Modification upgrading to 3.0 Standard Tax Interface
Deactivate condition base value formula 300
If a customer has the 2.2 advance modification installed within their system and is
upgrading to 3.0, condition base value formula 300 must be deactivated.
Transaction: VOFM
Menu Path: Formulas>Condition base values
Routine Number: 300
Place cursor on routine number 300, and go to the menu
Edit>Deactivate
Update programs have changed

SAP provides update utility programs to update external tax systems files with the
necessary data stored within SAP. Within SAP release 2.2 these programs were
RFYTXU00 for transaction summary updating, RFYTXU10 for line item
updating, and RFYTXU20 to force the tax over in summary to the external
systems files without performing a recalculation. These update utility programs
in SAP release 3.0 are RFYTXU00 for line item updating, and RFYTXF00 to
force the tax data over to the external tax systems files without recalculation.
Tax data stored in TTXU and TTXV must be updated to external tax system
In SAP release 2.2, if the configuration was set to do so, tax data was stored in
tables TTXU (summary) and TTXV (line item detail) per creation of an
accounting document. In SAP release 3.0 these tables have been changed to
TTXI and TTXY for summary and detail data respectively. Due to the above
tables and update utility programs changing, data within tables TTXU and TTXV
must be updated to the external tax systems files before the 3.0 upgrade takes
place in production.
Configuration changes
It is advised that this manual is read thoroughly due to changes in configuration
steps and methods.
Page 99
Appendix A:
2.2 Tax Interface Modification Upgrading to 3.0 Standard Tax Interface
Taxes 3.0
Guide
Communication changes from 2.2 to 3.0

For the interface to Taxware (formally AVP) within SAP release 2.2, CPIC
communications were utilized to pass data back and forth between the 2 systems.
In SAP release 3.0 all communications are established using RFC (Remote
Function Calls). This is SAPs standard TCP-IP protocol used for all its certified
interfaces.
Testing utility programs have changed
In SAP release 3.0 testing utility programs RFYTAT00 and RFYTXT00 no
longer exist. These programs were used to test CPIC connections for the 2.2
advanced modification only. This document will explain how to utilize SAPs
standard test tools to test the interface within 3.0.
Customer user-exit logic must be reapplied
Customer user-exit logic must be reapplied if the user-exit was being utilized
within release 2.2. The logic must be added to an include program ZXFYTU01
which is not delivered with SAP and must be created by the user. Please note that
the user-exit parameters have changed from 2.2 to 3.0. The new logic must be
altered to reflect these parameter changes.
not
Third party tax interface APIs

Vertex uses the same API (Translink) to interface with SAP for both the 2.2
advance modification as well as with release 3.0. Vertexs Translink would
have to be reinstalled when upgrading from 2.2 to 3.0. Taxware however, does
not utilize the same API (Taxwarelink) to interface with SAP in release 3.0 as it
did with release 2.2. Therefore, Taxwares Taxwarelink must be reinstalled when
upgrading from 2.2 to 3.0.
Product Code
If program FYTXPRCD is being utilized to link a product code to the material
master changes will have to be made. SAPs recommended approach would be to
utilize the user-exit EXIT_SAPLV61A_001 (see examples in appendix: J).
However the same program exists under a new name RFYTXPCD. This
Page 100
Appendix A:
2.2 Tax Interface Modification Upgrading to 3.0 Standard Tax Interface
Taxes 3.0
Guide
program will have to be modified the same way as FYTXPRCD was in 2.2. In
addition to this, the following lines would have to be uncommented from program
FV64A300:
* PERFORM FIND_EXT_PRODUCT_CODE(RFYTXPCD)
* USING
KOMP-MATNR TTXD-XEXTN
* CHANGING EXT_PRODCD.
Page 101
Taxes 3.0
Guide
Appendix B: General Ledger Accounts

If a G/L account is set up as being tax relevant, then tax amounts must be present in order
to create a financial document. For instance, if a revenue account, say 800000, is set up as
being tax relevant. The tax category within the G/L master record should contain an
output tax indicator. When posting a customer invoice to FI, the system will check to see
if tax line items exist for the invoice. If no tax line items exist, a financial document
cannot be created. Output tax is used for A/R, and input tax is used for A/P.
Page 102
Taxes 3.0
Guide
Menu Path: Accounting>Financial accounting>General Ledger>

Master records>Create/Change
Transaction:
FS01/FS02
Material consumption account subject to sales tax
Page 103
Taxes 3.0
Guide
Tax liability account
Page 104
Taxes 3.0
Guide
Revenue account subject to sales tax
105
Page
Taxes 3.0
Guide
Tax payable account
Page 106
Appendix C: Calculate Taxes on Net Amount

C.1:
Based on User ID
Taxes 3.0
Guide
C.2:
Based on Company Code/Region
Within SAP release 3.0C it is now possible to calculate taxes on net base amount based on
user-id as well as company and state using the tax interface. Prior to release 3.0C, it was
only possible to do this based on user-id when utilizing the tax interface. Of course
calculating taxes based on net amount was always possible per company and jurisdiction
with SAPs jurisdictional tax handling.
Page 107

C.1:
Based on User ID
Transaction:
FB00
Taxes 3.0
Guide
To calculate taxes based on net amount select the appropriate variable in transaction
FB00. The values maintained here are user-id specific.
Page 108

C.1:
Based on User ID
Transaction:
SU01
Taxes 3.0
Guide
After activating Calculate taxes on net amount via transaction FB00 user parameter ID
of F02 will be added to the user profile with value uppercase X. Do not change
parameter data within user maintenance transaction SU01. Parameter values are case
sensitive.
Page 109

C.2:
IMG Path:
Financial accounting>Financial accounting global settings>
Tax on sales/purchases>Calculation>Specify base amount
Taxes 3.0
Guide
Transaction:
OB69
Here the tax base can be set to net, based on company code. This functionality will only
work in conjunction with setting the tax jurisdiction to calculate taxes on net base amount
as well.
Page 110

C.2:
IMG Path:
Financial accounting>Financial accounting global settings>
Tax on sales/purchases>Basic settings>Define tax jurisdiction
code
Transaction:
OBCP
Taxes 3.0
Guide
Within the define tax jurisdiction transaction, it will be necessary to maintain the highest
level jurisdiction code, which will represent the state. Here taxes on net base amount can
be set, as well as discount on net amount. This will only work if the company has also
been defined to calculate based on net amount.
In the above example, the state jurisdiction code was set up based on the third party tax
system being used.
Page 111

C.2:
It is important to know that SAP DOES NOT allow posting of a document if

jurisdiction settings are different per line item. For example a line item which is
procured to a New Jersey jurisdiction which is set to calculate taxes based on
gross amount, and a line item which is procured to an Illinois jurisdiction which is
set to calculate taxes based on net amount cannot reside on the same document.
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Guide
All line items must be set to calculate taxes the same way. This applies to
calculating discount as well.
Page 112
Appendix D: Calculate Discount On Net Base Amount

Within SAP release 3.0C it is now possible to calculate the discount on net base amount
discarding taxes. This is determined based on company and state using the tax interface.
Of course calculating the discount based on net amount excluding taxes was always
possible per company and jurisdiction with SAPs internal jurisdictional tax handling.
Transaction:
OB70
Taxes 3.0
Guide
Here the discount base amount can be set to net value excluding taxes based on company
code. This functionality will only work in conjunction with setting the tax jurisdiction to
calculate the discount on net base amount as well.
To set the state jurisdiction code to calculate discount on the net base amount follow the
example on page 111.
Page 113
Appendix E: Update External Tax System Files

SAP stores all tax information in table BSET. The tax base amount, as well as all tax
amounts returned from the external tax system will be stored here. SAP provides report
RFUTAX00 which lists all tax information broken down by tax code and tax jurisdiction
code.
If a customer chooses to utilize the reporting functionality provided by the external tax
system, they must update the external tax systems files. In order to go about doing this,
data must first be stored in SAP tables TTXI and TTXY, header level data and item level
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Guide
data respectively. This data can then be passed onto the external tax system using SAP
provided update programs.
E.1:
E.2:
Updating SAP tables TTXI and TTXY

Update utility programs
Page 114

E.1:
SAP can be configured to capture the relevant data needed to be passed to an external tax
systems files for reporting purposes. Once configured, upon posting of a financial
document containing information which is relevant for tax reporting, the necessary tax
information of the document is posted to two SAP tables, TTXI and TTXY. (For the
2.2 tax interface modification these tables were called TTXU and TTXV. See Appendix A,
page 99). The updating of TTXI and TTXY can only take part after tables TRWCI,
TRWPR, and TRWCA are maintained with the appropriate entries. SAP delivers these
tables with the necessary entries, however table TRWCA must be activated in order to
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Guide
update TTXI and TTXY (see chapter 4.2, page 29 Activate external updating). Below
are the following entries which should come delivered.
Transaction:
SM31
Table TRWCI:
Component: EXTX
Table TRWCA:
Component:
To year:
Activ:
EXTX
2999
<<user must set to X to activate**
**see chapter 4.2, page 29 Activate external updating

Page 115

E.1:
Table TRWPR:
Trans:
BELEG
Time:
CLOSE
Seq.No:
120
Comp:
EXTX
Funct Module: US_TAXES_UPDATE_TABLE_PREPARE
Table TRWPR:
Trans:
BELEG
Taxes 3.0
Guide
Time:
POST
Seq.No:
120
Comp:
EXTX
Funct Module: US_TAXES_UPDATE_TABLE
Table TRWPR:
Trans:
DOCUMENT
Time:
CLOSE
Seq.No:
120
Comp:
EXTX
Funct Module: US_TAXES_UPDATE_TABLE_PREPARE
Table TRWPR:
Trans:
DOCUMENT
Time:
POST
Seq.No:
120
Comp:
EXTX
Funct Module: US_TAXES_UPDATE_TABLE
Page 116

E.2:
Report RFYTXU00 reads against SAP tables TTXI and TTXY and updates the
document tax information per line item to the external tax systems files. When
report RFYTXU00 is executed the data stored in TTXI and TTXY is
recalculated before it is updated. After the data is recalculated, consistency checks
are performed per line item. The first check is to see if the tax results recalculated
from the external tax system are the same as the tax results calculated during
invoice processing. The second check is to verify that the recalculated tax data is
consistent with the tax data stored in SAP tax table BSET.
If any of these consistency checks fail per line item, you will be unable to post the
FI document data to the tax system files using program RFYTXU00 until the data
has been checked and corrected. If however, after analysis, it is determined that
even though the data contains inconsistencies you would still like to update these
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Guide
documents you may do so by forcing the tax update with no recalculation using
report RFYTXF00.
Report RFYTXF00 will update the tax information with no recalculation. If the
data returned from the external tax system during update is different from the data
in SAP table BSET, then the tax information can only be updated in summary
(sum of all items per document) with program RFYTXF00. If the data returned
from the external tax system during update is different from the data returned
during invoice creation then the tax information can be updated in detail (per each
line item) with program RFYTXF00.
If handling tax exemptions within SAP, program RFYTXF00 would be the only
option to update the external tax systems files. This is because the update
program RFYTXU00 does a consistency check against the previously calculated
tax data during invoicing. Since SAP tax exemption handling bypasses the call to
the external tax system during invoicing, there is no data which was previously
calculated to compare against.
RFYTXU00 and RFYTXF00 can be scheduled in a batch run. If you would like
to update the tax information on-line, SAP provides an on-line front end report
RFYTXD00 which lists all relevant documents based on selection parameters.
Within this front end program it is possible to update documents individually, all
at once, and even force the update.
Page 117

E.2:
Update programs:
RFYTXD00 Display utility report for on-line updating
RFYTXU00 Update utility program
RFYTXF00 Force update program
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Report RFYTXD00
Page 118
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Appendix F: Maintain condition elements (FI)

NOTE:The following three steps are maintained with the same transaction/menu
path, usage and application entries:
F.1 Condition types (FI)
F.2 Access sequences (FI)
F.3 Tax Procedure (FI)
IMG Path: Financial accounting>Financial accounting global
settings>Taxes on sales/purchases>Basic settings>Generate
calculation procedure
Transaction:
OBYZ or
Transaction:
VK01 Usage: A Application: TX
Page 119
F.1:
Condition types (FI)
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Transaction:
OBQ1 or VK01.
Tables: T685, T685A

Condition Types Which Should Exist:
XP1E
XP2E
XP3E
XP4E
XP5E
XP6E
XP1I
XP2I
XP3I
XP1U
XP2U
XP3U
XP4I
XP5I
XP6I
XR1
XR2
XR3
XP4U
XP5U
XP6U
XR4
XR5
XR6
The condition types that end in I are used for input taxes, when the vendor includes tax
in the sale. Taxes in this case are usually included in the capitalization of the
material(s) purchased.
The condition types that end in E are for optional use, and are used when the user
wants to break out tax amounts and report them to an expense account
The condition types that end in U are for use taxes. It is typically used when the vendor
does not include tax.
Page 120
F.1:

The condition types listed above on page 119 below are tax interface specific. If
the condition types do not exist, check T685A in client 000 within the same
transaction OBQ1.
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To compare, and copy data from client 000 perform the following steps:
1.
Menu path:
Utilities>Compare>Client 000
Page 121
F.1:

2.
Switch from display to change mode
Menu path: Table view>Change
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Page 122
F.1:

3.
Select entries which are missing from your client and need to be copied
from client 000. This is done by positioning your cursor on the first entry to be
copied and choosing Select, then positioning the cursor on the last
entry
to be copied from client 000 and selecting Select end of block.
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The selected entries should now be marked for copying within the left margin.
Page 123
F.1:

4.
Copy the selected entries.

Menu path: Block>Copy
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Page: 124
F.1:

5.
The data will be copied to your target client. Verify that the entries are
correct, than back out of the screen and SAVE the data.
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Page 125
F.1:
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Detail Screen for XP1E condition type
Page 126
F.1:
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Detail Screen for XP4E condition type

(Note: the condition category field for XP5E and XP6E is also 4)
Page 127
F.1:
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Detail Screen for XP1I condition type
Page 128
F.1:
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Detail Screen for XP4I condition type

(Note: the condition category field for XP5I and XP6I is also 4)
Page 129
F.1:
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Detail Screen for XP1U condition type
Page 130
F.1:
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Detail Screen for XP4U condition type

(Note: the condition category field for XP5U and XP6U is also 4)
Page 131
F.1:
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Detail Screen for XR1 condition type
Page 132
F.1:
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(Note: the condition category field for XR5 and XR6 is also 4)
Page 133
F.2:
Access sequence (FI)

Transaction:
OBQ2 or VK01
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Table:
T682
Access sequence:
MWST
If MWST does not exist, add it to table T682. Note: table T682 is client
independent.
Access sequence: MWST
Page 134
F.2
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Access sequence MWST should contain condition table 003.
Page 135
F.2
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Condition table 003 should contain selection fields country and tax code.
Page 136
F.3
Tax Procedure (FI)

Transaction: OBQ3 or VK01
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Tables:
T683, T683S
Check (double click) on the procedure TAXUSX to make sure condition types
like the following have been assigned. If the procedure TAXUSX does not exist,
check T683, T683S in client 000 using program using the same step described for
coping condition types in section F.1 of this appendix. Note that for pricing
procedures, first table T683 which contains only the tax procedure name must be
copied, then you must go into details and copy the entries from table T683s.
Tax Procedure: TAXUSX
Page 137
F.3
Tax Procedure (FI)
Taxes 3.0
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Tax Procedure: TAXUSX (cont.)
Page 138
F.3
Tax Procedure (FI)
Taxes 3.0
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Page 139
F.3
Tax Procedure (FI)
Taxes 3.0
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Page 140
F.3
Tax Procedure (FI)
Taxes 3.0
Guide
Make sure alternative condition type formula 300 is maintained for the tax amount. Also
check alternative condition type formulas 301-306 are maintained for condition types:
(XP1I..XP6I, XP1E..XP6E, and XR1-XR6). Alternative condition type formulas 311316 must be maintained for condition types (XP1U-XR6U).
Page
141
Taxes 3.0
Guide
Appendix G: Control Data for Pricing (SD)

G.1
G.2
G.3
G.4
Condition types (SD)

Access sequence (SD)
Pricing Procedures (SD)
Relating Document Types to Procedures (SD)
Data can be maintained centrally using:

Transaction:
VK01 Usage: A Application: V
Page 142
G.1
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IMG Path: Sales and distribution>Basic functions>Pricing>

Pricing control>Define condition types
Transaction:
V/06 or VK01
Tables:
T685, T685A
Condition types which should exist:

XR1
XR2
XR3
XR4
XR5
XR6
UTXJ for country U.S.
CTXJ for country Canada
Check to make sure the above condition types (XR1..XR6) have been defined in
this table. These condition types are tax interface specific tax condition types.
Also make sure condition type UTXJ exists for the U.S. and condition type CTXJ
exists for Canada.
If the condition types do not exist, copy the appropriate entries from table T685A
in client 000 using the same steps described in section F.1 of appendix F.
Page 143
G.1
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Detail screen for UTXJ condition type
Page 144
G.1
Taxes 3.0
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Detail screen for CTXJ condition type
Page 145
G.1
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Page 146
G.1
Taxes 3.0
Guide

(Note: the condition category field for XR5 and XR6 is also 4)
Page 147
G.2

Check to make sure the access sequence (UTX1) exists in the client where taxes
are being setup. If UTX1 does not exist, create it as shown below in table T682
Taxes 3.0
Guide
for the condition type and T682A for the details. Note: Access sequences are client
independent. UTX1 access sequence is used for condition type UTXJ and
CTXJ. Condition types XR1 - XR6 do not use an access sequences.
IMG Path:
Sales and Distribution>Basic functions>Pricing>

Pricing control>Define access sequences
Transaction:
V/07 or VK01
Table:
T682
Access sequence: MWST
Page 148
G.2
Taxes 3.0
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Access sequence UTX1 should contain condition table 010.
`
G.2
Page 149
Taxes 3.0
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Access Seq Condition table

UTX1
40 Country/State/Customer Classif. 1/Material Classification 1
Condition
Departure country
Region
TaxClass1-Cust.
TaxClass1-Matl.
Doc. Field
Departure country
Region
TaxClass1-Cust.
TaxClass1-Matl.
Page 150
G.3
Taxes 3.0
Guide
SAP delivers a template pricing procedure (RVAXUS). When creating your own
pricing procedure make sure conditions UTXJ, XR1, XR2, XR3, XR4, XR5, and
XR6 are set up the same as in RVAXUS. If the condition types do not exist,
If the condition types do not exist, copy the appropriate entries from table T683
and T683S in client 000 using the same steps described in section F.1 of
appendix F. Note that for pricing procedures first T683 which contains only the
pricing procedure name must be copied, then you must go into details and copy
the entries from T683S.
IMG Path:
Sales and distribution>Basic functions>Pricing>Pricing

control>Define and assign pricing procedures
Transaction:
V/08 or VK11
SAP template pricing procedure RVAXUS for the U.S.

Page 151
G.3
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The FROM entry for condition types UTXJ, XR1..XR6 should contain the Level
number of the taxable amount to be sent to the external tax package. Condition type
UTXJ must have the Statistical indicator set. Keep in mind that although SAP delivers
pricing procedure RVAXUS with the account keys populated for condition types
XR1..XR6, these account keys are not used in posting tax values to FI. The account keys
set up in the tax procedure TAXUSX are used to post tax values to FI.
Please note: as of release 3.0 no Alternative Condition Base Value formulas are used as
they were in the 2.2 tax interface modification. Notice that condition type UTXJ uses
Alternative condition type formula 300, whereas XR1 through XR6 condition types use
Alternative condition type formulas 301-306 respectively.
Page 152
G.3
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SAP template pricing procedure RVAXCA for Canada

A pricing procedure for Canada is not delivered. Iit is up to the user to add the
appropriate condition types above to their Canadian procedure.
Page 153
G.4
Relating Document Types to Procedures (SD)
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Guide
Document types must be related to the tax pricing procedures in order for the
document to calculate the correct tax.
IMG Path:
Sales and Distribution>Basic functions>Pricing>
Pricing control>Define and assign pricing procedures
Page 154
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Appendix H: Verify Account Processing Key Setup

H.1
Check and change settings for tax processing
Check that the account processing keys in table T007B reflect accounts that are
liabilities for taxes. Transaction OBCN is used to create new account keys in
T687/687T.)
IMG Path:
and

settings>Taxes on sales/purchases>Basic settings>Check
change settings for tax processing
Transaction:
OBCN
Table:
T007B
Page 155
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H.1
Process keys for condition types XP1E..XP6E, XP1U..XP6U, and XR1..XR6 should have
the posting indicator set to 2 (separate line item).
Page 156
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H.1
Page 157

H.1
Taxes 3.0
Guide
Process keys for condition types XP1I..XP6I should have posting indicator set to 3
(distribute to relevant expense/revenue items).
Page 158
Appendix H:
H.2

Define tax accounts
Taxes 3.0
Guide
IMG Path:

settings>Tax on sales/purchases>Posting>Define tax accounts
Transaction:
OB40
Table:
T030K
Verify that the account keys used (like VS1..VS4 and MW1..MW4 , above), are
defined. Then make sure accounts (i.e. NVV) where the original account on the
document line is to be charged do not exist, as the system will book charges to the same
account as the base. You will need to identify the GL chart of accounts (e.g. CAUS) the
first time through.
Account keys like NVV, with a posting indicator 3, will not appear on the list
Page 159
Appendix H:
H.2

Define tax accounts
Taxes 3.0
Guide
1. GL or Cost Element account assignment Liabilities & Expenses.
Page 160
Appendix H:
H.2

Define tax accounts
2. Posting keys (e.g.40 or 50)
Taxes 3.0
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Page 161
Appendix H:
H.2

Define tax accounts
3. Rules
Taxes 3.0
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Page 162

H.3
General Ledger Maintenance
Menu Path:
Accounting>Financial accounting>General Ledger>Master

Records>Create>Change>Display
Taxes 3.0
Guide
Transaction:
FS01/FS02/FS03
For the accounts in the prior step (T030K), Review the account definition and Tax
Category field in the account masters that will be used for tax liabilities. The Input and
Output determination on the account master is important.
Then consider the asset accounts for nontaxable(?) purchases of inventory. Also consider
the set of accounts and primary cost elements that correspond to the NVV account
processing key; their category should be Input or nothing. Check revenue accounts used in
SD, too.
Page 163

H.3
General Ledger Maintenance
The sales and use tax procedure for MM/FI allows the charge (Debit) for taxes to go to a
separate account, when used typically titled sales tax expense clearing. As delivered,
the G/L accounts corresponding to expense to separate accounts, (XP1E, XP2E, etc.)
are clearing accounts. Most users will not use this method, but will choose to have
Taxes 3.0
Guide
taxes go to the same account as the charge, therefore the I series (e.g. XP1I) use an
account key with rules like NVV as delivered. Liability accounts for A/P sales and use tax
liability and A/R sales tax liability(XP1U..XP4U, XR1..XR4) need to be defined. The GL
accounts corresponding to the account keys need to be setup as appropriate.
On the G/L account master record there is a field called tax category. Following is a small
guide of how to populate that field for different accounts.
A/P Reconciliation Account
160000
All tax types allowed
A/R Reconciliation Account 140000
All tax types allowed
Sales Revenue
800000
Only output tax allowed
Exp./Materials consumed
410000
Only input tax allowed
A/R Sales Tax (State)
175001
>
Output Tax
A/R Sales Tax (County)
175002
>
Output Tax
A/P Use Tax
154010
<
Input Tax
Page 164
Appendix I: Tax Only Adjustments

Tax only credits and debits are generally accumulated over time and may not correspond
to a single invoice. This is standard SAP functionality not specific to the tax interface.
The following examples shows how SAP handles tax-only credits and debits.
A/R Customer invoice
Taxes 3.0
Guide
In the above example of a customer invoice the customer account is debited $1,087.50
(posting key 01) which is the total sales amount including tax. The revenue account of
800000 is credited $1,000.00 (posting key 50) using a taxable tax code of O1, and the tax
accounts 175001-175004 are credited with the corresponding tax (posting key 50). Taxes
were determined automatically based on the sales amount of $1,000.00.
Page 165

A/R Customer credit memo
Taxes 3.0
Guide
Now let us say it was determined that this was suppose to be a tax exempt transaction.
For instance, this customer normally purchases goods for consumption, however for this
particular order the customer was purchasing for resale. Taxes now must be adjusted. A
customer credit would have to be created to adjust the tax amounts which were billed to
the customer. The tax amount of $87.50 would be credited to the customer (posting key
11) and the tax amount would have to now be debited (posting key 40) to the corresponding tax accounts 175001-175004. Since taxes are being determined automatically, a tax
base amount must be provided to calculate the tax. A taxable amount of $1,000.00 with a
tax code of 01 would be entered as a debit (posting key 40) to revenue account 800000 so
that the tax amounts can be calculated and debited to the appropriate tax accounts. This
would cause the document to be out of balance by $1,000.00 due to this amount having to
be entered as a debit to calculate the tax. To offset this, an amount of $1,000.00 with a
tax exempt tax code of O0 would be credited (posting key 50) to account 800000. Now
the taxes have been adjusted, and the document is in balance.
Page 166

A/P Vendor invoice
Taxes 3.0
Guide
In the above example, the vendor charges sales tax of $50 for a $1,000.00 order. A
$1,050.00 amount is credited to the vendor account (posting key 31) and an amount of
$1,050.00 is debited to the cost account 400000 (posting key 40) using a taxable tax code
of I1.
Page 167

A/P Vendor credit memo
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Guide
Now lets say the vendor should not have collected tax on this transaction because the
purchase should have actually been tax exempt. The tax amount of $50 must be debited to
the vendor account (posting key 21) and the cost account 400000 must be credited
(posting key 50) with the tax amount of $50. To calculate the tax, a credit amount of
$1,000 would have to be posted to cost account 400000 (posting key 50) using a taxable
tax code of I1. To offset this $1,000 credit, an amount of $1,000 would be debited to the
cost account 400000 (posting key 40) using a tax exempt code of I0.
Page 168
Appendix J: User-Exit
Customer user-exits are provided by SAP to handle customer specific modifications. Due
to the complexities of U.S. tax rules and regulations which seem to vary based on
everything from type of industry to business practice, a user-exit has been provided within
the tax interface programming logic.
Taxes 3.0
Guide
A customer user-exit is essentially a function module using a unique naming convention, in

which set import and export parameters are defined to limit the data which can be
manipulated. This is to safeguard certain data from being changed. This function module
is attached to an enhancement which may contain one or more of these function modules.
This section explains how to set up and use the tax interface user-exit
EXIT_SAPLV61A_001 and give the most common examples.
It is recommended to utilize this user-exit as a last resort, only after all other work arounds
and configuration have been explored.
Page 169
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User-exit EXIT_SAPLV61A_001 can be accessed using transaction SE37. This userexit is called from within program FV64A300. In the above screen print you can see the
import parameters and table in which data can be accessed:
KOMK
KOMP
T007A
TTXD
KOMV
Pricing Communications-Header
Pricing Communication Item
Tax keys
Description of tax jurisdiction code structure
Price Determination Communications-Condition Record
All data which can be changed resides in tax interface structure COM_TAX .
Page 170
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An include program name resides within the user-exit called ZXFYTU01. This include
program does not come delivered with SAP. The customer must create this include
program using transaction SE38. The reasons for this are when upgrading to a new
release no data placed into the user-exit is overridden. When creating the include program
via transaction SE38 make sure for the attributes it is assigned Type: I for include
program, and Application: F for financial accounting. After ZXFYTU01 has been saved
generate main program SAPLXFYT. Program ZXFYTU01 is where all customer
specific ABAP programming logic will be added.
Page 171
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After ZXFYTU01 has been created, a project must be created which contains the SAP
enhancement FYTX0001. Enhancement FYTX0001 contains component
EXIT_SAPLV61A_001. This is done using transaction CMOD. Enhancement
FYTX0001 is delivered with SAP and can be display with transaction SMOD.
The above example shows a project being created via transaction CMOD. The project
name is user defined. Here is called ZUSTAX01.
Page 172
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Within transaction CMOD enhancement (extension) FYTX0001 is assigned to the user

defined project ZUSTAX01.
Page 173
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Save and active the project. Now you are ready to add logic to you user exit.
Page 174
*----------------------------------------------------------------------*
* INCLUDE ZXFYTU01
*
*----------------------------------------------------------------------*
Taxes 3.0
Guide
*----Must define all tables being used

tables: knvv,
customer sales data
ttxp,
product code
mara,
material master
kna1.
customer general data
*----Must define internal table if looping through t_komv
data: begin of save_t_komv.
include structure komv.
data: end of save_t_komv.
if i_t007a-mwart = 'A'.
" Accounts Receivable
*----Division code (Example 1: Based on sales organization)

c_com_tax-division = i_komk-vkorg.
*----Division code (Example 2: Based on company code)
c_com_tax-division = i_komk-bukrs.
*----Tax Exemption Reason Code (Example: taken from customer group)
select single * from knvv
where kunnr = i_komk-kunnr
and vkorg = i_komk-vkorg
and vtweg = i_komk-vtweg
and spart = i_komk-spart.
if sy-subrc = 0.
c_com_tax-exreason = knvv-kdgrp.
" Customer group(Sales)
endif.
*----Tax Exemption Reason Code (Example 2: taken from tax code)
c_com_tax-exreason = i_t007a-mwskz.
Page
175
*----Product Code (Example 1: defined product field exists in komp)
select single * from ttxp
Taxes 3.0
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where xextn = 'A'

and procd = i_komp-zzzzz.
" Defined field in komp
if sy-subrc = 0.
c_com_tax-prod_code = ttxp-xprcd.
endif.
*----Product Code (Example 2: defined product field exists in mara)

select single * from mara
where matnr = i_komp-matnr.
if sy-subrc = 0.
select single * from ttxp
where xextn = 'A'
and procd = mara-zzzzz. " Defined Field in mara
if sy-subrc = 0.
c_com_tax-prod_code = ttxp-xprcd.
endif.
endif.
*----Point of Order Acceptance (Example 1: defaults from ship-to)
c_com_tax-txjcd_poa = i_komk-txjcd.
" Ship-to jurisdiction
*----Point of Order Acceptance (Example 2: sales office jurisdiction)
case komk-vkbur.
when '0001'.
c_com_tax-txjcd_sa = 'PA1902500'. " sales office jurisdic
when '0002'
c_com_tax-txjcd_sa = 'IL6061400'. " sales office jurisdic
endcase.
Page 176
*----Customer account class (Example: using customer class in Marketing)

select single * from kna1
where kunnr = i_komk-kunnr.
if sy_subrc = 0.
Taxes 3.0
Guide
c_com_tax-accnt_cls = kna1-kukla.
endif.
*----Freight (Example 1: using SAP standard freight conditions)
save_t_komv = t_komv.
loop at t_komv where kschl = 'HD00'
or kschl = 'KF00'.
c_com_tax-freight_am = c_com_tax-freight_am + t_komv-kwert.
endloop.
t_komv = save_t_komv.
*----Freight (Example 2: using user-defined freight conditions)
save_t_komv = t_komv.
loop at t_komv where kschl = 'ZF10'
or kschl = 'ZF11'.
or kschl = 'ZF20'.
c_com_tax-freight_am = c_com_tax-freight_am + t_komv-kwert.
endloop.
t_komv = save_t_komv.
elseif i_t007a-mwart = 'V'.
" Accounts Payable
*----Point of Order Acceptance (Example 3: purchase org. jurisdiction)

case komk-ekorg.
when 'US01'.
c_com_tax-txjcd_sa = '0507590401'. " purchase org. jurisd
when 'US02'.
c_com_tax-txjcd_sa = '3100100401'. " purchase org. jurisd
endcase.
endif.
Page 177
**NOTE - SAP Standard Defaults**

* Division default is business area
* Point of order acceptance default is ship-from jurisdiction
* Point of order origin default is ship-to jurisdiction
Taxes 3.0
Guide
The above examples are the most frequent issues which come up. Please keep in mind
that these are only examples, and there may be more than one way of handling these and
other issues.
Page 178
Appendix K: Freight
Taxation on freight can be handled one of two ways.

1.
Placed on the document as a separate line item
Taxes 3.0
Guide
2.
Freight amount is passed through to the external tax system along with the
line item amount
In this second situation, the amount of the freight is passed to the external tax
system within the field com_tax-freight. This field must be populated the userexit (see examples in appendix J). The logic within the user-exit should loop
through condition table KOMV and accumulate all freight amounts which are to
be passed to the external tax system. This freight amount will be taxed
accordingly and rolled into the line item tax amount.
Page 179

Tax Interface

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Tax Interface

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Taxes 3.

SAP Tax Interface Configuration

Basic Data Provided..................................................................................................vi

Tax Interface Configuration

Customizing Master Data Tax Indicators (SD)

Customizing Master Data Tax Indicators (MM)

Master Data Maintenance (SD)

Master Data Maintenance (MM)

SAP Tax Interface Configuration

Tax Interface Modification Upgrading to 3.0 Standard Tax Interface..............99

General Ledger Accounts.....................................................................................102

Calculate Taxes on Net Amount...........................................................................107

Calculate Discount On Net Base Amount............................................................113

Update External Tax System Files.......................................................................114

Maintain condition elements (FI).........................................................................119

Control Data for Pricing (SD)..............................................................................142

Verify Account Processing Key Setup

Tax Only Adjustments...........................................................................................165

SAP Tax Interface Configuration

SAP Tax Interface Configuration

Third Party Software & API

libraries, then these problems should be directed to and resolved by SAP.

SAP Tax Interface Configuration

Basic Data Provided:

SAP Tax Interface Configuration

Basic Concepts: MM/FI:A/P

SAP Tax Interface Configuration

SAP Tax Interface Configuration

A RFC destination must be created which specifies the type of communication

Financial accounting>Finaancial accounting global

The destination must be setup as a TCP/IP communication protocol.

SAP Tax Interface Configuration

SAP and Tax Software Package reside on the same server

SAP Tax Interface Configuration

SAP and Tax Software Package reside on different servers

SAP Tax Interface Configuration

Testing the connection

SAP Tax Interface Configuration

Testing the connection

SAP Tax Interface Configuration

Testing the connection

SAP Tax Interface Configuration

Assign external tax system to logical destination.

SAP Tax Interface Configuration

Financial accounting>Financial accounting global settings>Tax

JUR = Jurisdiction determination

Assign external tax system to logical destination.

SAP Tax Interface Configuration

RFC_DETERMINE_JURISDICTION = jurisdiction determination

Name of destination setup in SM59, i.e. AVP / VERTEX.

SAP Tax Interface Configuration

Test Jurisdiction Determination

Tools>ABAP/4 Workbench>Function Library>Test

RFC Function Module: RFC_DETERMINE_JURISDICTION

Test Jurisdiction Determination

SAP Tax Interface Configuration

Test Jurisdiction Determination

SAP Tax Interface Configuration

Test Jurisdiction Determination

SAP Tax Interface Configuration

Test Tax Calculation

Tools>ABAP/4 Workbench>Function Library>Test

SAP Tax Interface Configuration

RFC Function Module: RFC_CALCULATE_TAXES