Tax Jurisdiction - Erp Sd - Scn Wiki 3wd5b

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Tax jurisdiction Created by Kelly Ynoue, last modified on Apr 04, 2016

Purpose The purpose of this page is to clarify the functionality of tax jurisdiction in SD.

Overview In the following sections you will find information about the Customizing in SD and FI, Tax determination in the Sales document and Releasing to ing.

Customizing in FI and SD Customizing in FI SPRO > Financial ing > Financial ing Global settings >Tax on Sales/Purchases > Basic settings Access Sequences Define Condition Types Define Procedures

https://wiki.scn.sap.com/wiki/display/SD/Tax+jurisdiction

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Tax jurisdiction ERP SD SCN Wiki

The tax procedures are similar to SD pricing procedures. They contain all tax conditions that could appear in the SD document. Examples: TAXUS TAXUSJ TAXUSX


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The Tax jurisdictions are necessary in countries were they are activated. Technically speaking: The country has a Tax procedure assigned in transaction OBBG (field T005KALSM)

If this Tax procedure has entries in transaction OBCO (table TTXD), then the country is relevant for Tax jurisdiction


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It means that sales documents raised in this country should have: 1. Tax jurisdiction conditions in pricing procedure 2. The shipto party should have tax jurisdiction in master data. In case of export, and the shipto party has not tax jurisdiction, then a default should be set in transaction OBCL (see KBA 1672122)

Customizing in SD The pricing procedure must include the trigger condition and the tax conditions. In this sample, in US: trigger condition UTXJ, tax conditions JR1, JR2, JR3, JR4

Examples: RVAJCA Standard CA /With Jur.Code    \  _ tax jurisdiction values calculated internally from FTXP RVAJUS Standard USA /With Jur.Code  / RVAXUD Standard USA /with Jur. ext.  \ _ tax jurisdiction values calculated by external tax system (Vertex, Sabrix, Taxware, etc.) RVAXUS Standard USA /with Jur. ext.  /


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Trigger condition Trigger condition is defined in V/06. The purpose of trigger condition is only to set the tax code. The tax value will be build by conditions JR1, JR2, JR3, JR4.

UTXJ is the trigger condition used in US. It is calculated on item level. In external calculation (from external tax system) it has value formula 300 assigned the pricing procedure. It is triggered in function Pricing.


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Trigger conditions UTXD and UTXE are used in external tax calculation. Both conditions must be used together in the pricing procedure (for technical reasons). Condition UTXD has value formula 500 and condition UTXE has value formula 501. They are triggered only by FM PRICING_COMPLETE. The RFC is called only once per document. This is called the MaxTax procedure (developed by FI), and it is supposed to be faster.

Tax jurisdiction conditions Tax jurisdiction conditions JR1, JR2, JR3, JR4 must be defined both in SD and in FI. In SD the condition JR1 does not have access sequence. The amounts of conditions come from FI.


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Determination of the amounts in a sales document 1. Tax jurisdiction code is copied from the shipto party or from OBCL 2. Tax jurisdiction conditions are included in xkomv in form XKOMV_AUFBAUEN_STEUERN 3. The system determines the tax jurisdiction amounts from FTXP (in case of internal calculation) from value formula 300 or 500 (in case of external calculation)


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Relevant source code in Pricing


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Note that after XKOMV_AUFBAUEN_STEUERN (LV61AA57), the base value and condition value are not determined yet.


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The amount, base value and condition value are determined in XKOMV_BEWERTEN.


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Inside XKOMV_BEWERTEN, the system determines the tax jurisdiction amounts from FTXP (in case of internal calculation) from value formula 300 or 500 (in case of external calculation)

Internal calculation


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External Calculation Formula 300 (FV64A300) is executed at item level. Formula 500 (FV64A500) is executed at header level (Header > Conditions) in the MaxTax procedure. The RFC is only triggered by value formula 300 or 500. The value formulas 301, 302, etc. only retrieve values from the results determined by formulas 300 and 500. Obs.: For external tax calculation it is recommended that the rate is maintained as 100% in FTXP. Debug: 1. Check what is the value formula assigned to the relevant tax jurisdiction condition. For example, tax jurisdiction condition XR1 is assigned to value formula 301 (FV64A301) in the pricing procedure. 2. Set a breakpoint in the statement “call function 'GET_TAX_RESULTS_FOR_301_306‘” https://wiki.scn.sap.com/wiki/display/SD/Tax+jurisdiction

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3. Create the SD document or update the pricing with pricing type ‘G’ (which redetermines the tax conditions), for example. 4. Check the call stack. The values returned by GET_TAX_RESULTS_FOR_301_306  are only ‘effective’ when the value formula (FV64A301 in this example) is called by form XKOMV_KWERT_ERMITTELN.

Another way to debug: 1. SE24 2. Class CL_XTAX_RULES_RFC, Method RFC_CALCULATE_TAXES_DOC 3. Set a Breakpoint at ‘call function 'RFC_CALCULATE_TAXES_DOC'


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If condition control (technical field KSTEU) is ‘F’ or ‘H’, the external tax system is NOT called. Note 1043372 changes KSTEU in the base formula so that the external tax system could be called.

Releasing to ing


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Closer look at error message FF805 Set a watchpoint where the error message is issued and check structures BSEG and BSET. In FI, BSEG contains line items and BSET contains the tax lines. If this structure does not contain a tax line, it is either because the condition has base value zero or is completely missing in SD. There is a note (1255945) about how to create pure tax documents but it is very, very rare. This note clears xauto in SD and forward to FI. If xauto is cleared, the FI checks are not performed. We could also check XACCIT when AC_DOCUMENT_CREATE is called. Relevant fields:


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TAXIT if it is a tax line. TXJCD (different per level), TXJDP (the generic), TXJLV (the level) XACCCRFWBAS contains the base value. Obs. 1: the trigger condition is never added to XACCIT Obs. 2: the  determination for tax conditions is performed in FI Example of XACCIT ed to FI with Tax jurisdiction:

Export cases with Tax Jurisdiction The standard system behavior regarding the tax jurisdiction code for export cases has been changed with the following notes: 1628962 Export with invalid tax jurisdiction https://wiki.scn.sap.com/wiki/display/SD/Tax+jurisdiction

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1768395 Export with invalid tax jurisdiction (1) 1809374 Export with invalid tax jurisdiction (2) 1899214 Export with invalid tax jurisdiction (3) 2016058 Export with invalid tax jurisdiction (4) 2095331 Export with invalid tax jurisdiction (5) After all these notes are implemented (via SNOTE or delivered in  Package), the default tax jurisdiction code from OBCL is used in all export cases (instead of the shipto party tax jurisdiction code) as a result of the corrections. This data is transfered to the interface for the external tax system. Within this interface it is decided that for this default tax jurisdiction code, no call to the external tax system is needed as this business would always lead to a zero percentage rate. In case another behavior is preferred (to not use this default tax jurisdiction code for these export processes) then you could use program MV45AFZZ for the order process and program RV60AFZZ for the invoice process (FORM EXIT_PRICING_PREPARE_TKOMK.) Here you could overwrite the TKOMKTXJCD with KUWEVTXJCD (the one from the shipto partner) for exports. Consulting Note 2016990 has an example of this modification for export cases between US and Canada. Consider SAP Notes 83020 and 381348 in this regard.

Related Content Related SAP Notes SAP Note 392696: R/3 Tax Interface Configuration Guide SAP Note 1899214: Export with invalid tax jurisdiction (3) SAP Note 419124: Export billing document with tax jurisdictions

tax

jurisdiction

obbg

obco

ftxp jr1

external jr2

jr3

jr4

sabrix xr1

taxware

vertex

xr2

xr4

xr3

export xr5

xr6

usa

canada

brazil

trigger

xkomv_aufbauen_steuern

txjcd

utxd

utxe

maxtax

utxj

obcl

taxusj

taxusx

get_tax_results_for_301_306

rfc_calculate_taxes_doc

ksteu

5 Comments


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Chandan Roy Choudhury


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Hi Kelly, We in our project have a requirement from client to replace vertex with internal SAP R/3 configuration as they dont want to continue with vertex because of cost and minimal business in US,Canda. Now while searching the config guide + development required(if any) I could not find a specific guide for required IMG steps and others to set up internal tax jurisdiction for SD/MM/FI transactions (without using external tax software" Can you confirm me whether your wiki would cover the MM part as well for determination of tax rate using jurisdictions in US and Canada without using vertex  OR, its only the wiki is applicable for FI+SD setup. If not is there any doc for MM part ? I also have some open points if you can address: 1.For Cost Center PO how to maintain the TAX Rate through condition record ? Initially we were thinking whether we should use material+jurisdiction code ( negative point on this is cost centre based PO wont have mat master)combination or,Vendor + jurisdiction code combination 2.How to identify the TAX Rate as we found and also you concurred that in US the tax rate is varying with different combinations from region to region ( e.f California) how to handle this dynamic combination for fetching tax rate. Also we believe for 'same' juridction code but fo rdifferent postal codes tax rates vary in US ? how do we handle(SETUP) that in ECC 3.In case of standard SAP PO defaults the plant jurisdiction code instead of vendor master jurisdiction code.We are not sure whether tax derivation should always be based on vendor jurisdiction code if yes, then how defaulting to vendor jur code can be done ? a.so we are not sure if this always be vendor jurisdiction code and b.if yes then how to default this , is there any  exit or, customization known ? 4.As we know in ECC we would have to maintain condition record with rate for 'All' jurisdiction codes that currently present in vertex So we are thinking is there any way to maintain in bulk / uplaod than maintaining manually one by one as this would be a tedious task. 5.Should we use 'TAXUSJ' only as tax procedure in ECC for replacement of vertex or, a custom tax procedure would have to be created. 6.in US teh jurisdiction codes are of 10 char but in ECC standard in TAXUSJ its 9 char ? should we use 10 char only by setting up as below: The main difference between the Tax Jurisdiction Code between the standard and Vertex is for Std US Tax jurisdiction code consists of 9 digits https://wiki.scn.sap.com/wiki/display/SD/Tax+jurisdiction

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County Code(2) + State code (3) + ZIP Code (4) whereas for Vertex there is an extra digit denoting City /Town at the end i.e. 10 digits. This can be manually overridden by making it 0 . 7.how will the tax rate changes update will happen after golive? is there a way to automate ? 8.manual maintenance in ECC for initial and delta , in either case is there any  / autochange possible ? Regards, Chandan Roy Choudhury

atul kumbhani A very well written article. Great Job!

Adriano Sommerlatte Excellent detailed explanation,  Kelly Ynoue. Well done. Question: DYK whether SAP released any enhancement for Customer and material tax classification on intercompany billing"... Note: 10560. Thank you.

Alexander Lim Thanks for the useful documentation, this is exactly what people are looking for. Not the theoretical article, but high value technical article.


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Tushar Karwa Excellent article ! very helpful

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