Summary -

Almost every country has taxable transactions. The taxable transactions can be incoming or outgoing where input or output tax should apply. For example, customer/vendor transactions. The creation of tax codes for taxable transactions includes the below steps -

  • Define input tax
  • Define output tax

Define Input Tax: -

In the below process, we are creating a tax code with 5% input tax.

Step-1: Enter the transaction code FTXP in the SAP command field and click Enter to continue.

Maintain Tax codes for Sales and Purchases

(OR)

Enter the transaction code SPRO in the SAP command field and click Enter to continue.

Maintain Tax codes for Sales and Purchases

Click on SAP Reference IMG.

Maintain Tax codes for Sales and Purchases

Expand SAP Customizing Implementation Guide → Financial Accounting → Financial Accounting Global Settings → Tax on Sales/Purchases -> Calculations -> Define Tax Codes for Sales/Purchases. Click on Execute.

Maintain Tax codes for Sales and Purchases

Step-2: In the next screen, select the country code and click on right mark.

Maintain Tax codes for Sales and Purchases

Step-3: In the next screen, enter the new tax code (2-digit alphanumeric) and press Enter.

Maintain Tax codes for Sales and Purchases

Step-4: Enter the below details in the new dialog box opened ad click on right mark to proceed.

  • Tax code Description – Enter the tax code description
  • Tax Type – Enter V or select input tax type.
Maintain Tax codes for Sales and Purchases

Step-5: In the next screen, enter the Input tax -Tax Percent. Rate as 5 and press Enter.

Maintain Tax codes for Sales and Purchases

Step-6: Once all the details entered, click on the Save button to save the changes.

Maintain Tax codes for Sales and Purchases

Step-7: Status bar displays the below message once the input zero-percent tax code defined successfully.

Maintain Tax codes for Sales and Purchases

Define Output Tax: -

In the below process, we are creating a tax code with 7% output tax.

Step-1: Enter the transaction code FTXP in the SAP command field and click Enter to continue.

Maintain Tax codes for Sales and Purchases

Step-2: In the next screen, select the country code and click on right mark.

Maintain Tax codes for Sales and Purchases

Step-3: In the next screen, enter the new tax code (2-digit alphanumeric) and press Enter.

Maintain Tax codes for Sales and Purchases

Step-4: Enter the below details in the new dialog box opened ad click on right mark to proceed.

  • Tax code Description – Enter the tax code description
  • Tax Type – Enter A or select Output tax type.
Maintain Tax codes for Sales and Purchases

Step-5: In the next screen, enter the Output tax -Tax Percent. Rate as 7 and press Enter.

Maintain Tax codes for Sales and Purchases

Step-6: Once all the details entered, click on the Save button to save the changes.

Maintain Tax codes for Sales and Purchases

Step-7: Status bar displays the below message once the output zero-percent tax code defined successfully.

Maintain Tax codes for Sales and Purchases

Technical Information: -

  • Transaction Code: - FTXP
  • Navigation path: - SPRO → SAP Reference IMG → SAP Customizing Implementation Guide → Financial Accounting → Financial Accounting Global Settings → Tax on Sales/Purchases -> Calculations -> Define Tax Codes for Sales/Purchases