VAT -TAX CONFIGURATION & TRANSATIONS

CHAPTER 15

Table of Contents
1 Introduction..........................................................................................................2
1.1 Purpose..................................................................................................................2
2 Taxes info at a Glance.........................................................................................2
3 Value Added tax –Input tax.................................................................................2
3.1 Basic Customizing.................................................................................................3
3.1.1 Define Tax Procedure............................................................................................3
3.1.2 Create New Procedure (If necessary)...................................................................4
3.1.3 Assign country to calculation procedure...............................................................4
3.1.4 Calculation.............................................................................................................5
3.1.5 Create Input Tax code (FTXP)...............................................................................6
3.1.6 GL Account properties of Tax GL accounts...........................................................8
3.1.7 Post invoice with newly created Tax code.............................................................8
4 Value Added tax - Output Taxes.......................................................................10
4.1.1 Create Output tax –FTXP....................................................................................10
4.1.2 Book a customer invoice with new tax code........................................................11

5 Tax reports.........................................................................................................12
5.1.1 There are some important reports.......................................................................12
6 Check List............................................................................................................13

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1 Introduction
1.1 Purpose
The purpose of this Configuration document is to:

 Provide for effective support after deployment

 To enable additions to existing configuration

2 Taxes info at a Glance

Forms of taxes
1. Value added tax (Input tax-purchases & Output tax-sales)
2. Tax on Purchases ( Sales tax/Use tax- not applicable in India)
3. Additional taxes ( Investment-Norway/Clearing tax-Belgium)
4. Withholding tax

Calculation procedure contains

1. Order of steps
2. Condition types
3. Acct key or process key

Calculation methods:
Base amount is including CD is Gross method
Base amount is excluding CD is net method
What tax code does?
1. It calculates tax amount
2. Posts the calculated amount to GL account
3. Adjustments ( +CD or –CD)
4. Tax reports

3 Value Added tax –Input tax

Via Menus
Financial Accounting (New) > Financial Accounting Global settings (New) >
Taxes on sales and purchases> Basic settings > Check calculation
procedure > Define procedures
Via Transaction Code SPRO

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DC on Define procedures (Access sequence and condition types are done in MM module)

3.1 Basic Customizing

3.1.1 Define Tax Procedure

Select the procedure and click on

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3.1.2 Create New Procedure (If necessary)

Select the relevant country procedure and click on Click on

Rename the procedure and description as necessary. Press enter. A message comes up

Click on and save the entry.

3.1.3 Assign country to calculation procedure

Follow same path as above. Click on

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Assign the procedure to the country.

Note: Only one procedure per country can be assigned. Click on save icon

3.1.4 Calculation
Via Menus
Financial Accounting (New) > Financial Accounting Global settings (New) >
Taxes on sales and purchases> Calculation
Via Transaction Code SPRO

Click on

Example

In the following an example is given for each possible combination. In each case, the material value is 100.00, the
possible discount percentage 3.00 %, and the tax percentage 10.00 %.

1) Gross tax base, Gross discount base

Tax base 100.00 ==> Tax amount 10.00

Possible discount amount (3.00 % of 110.00) 3.30

Invoice amount 110.00

2) Gross tax base, Net discount base

Tax base 100.00 ==> Tax amount 10.00

Possible discount amount (3.00 % of 100.00) 3.00

Invoice amount 110.00

3) Net tax base, Net discount base

Tax base 97.00 ==> Tax amount 9.70

(Tax base = Value of goods - Possible discount = 100.00 - 3.00)

Possible discount amount (3.00 % of 100.00) 3.00

Invoice amount 109.70

3.1.5 Create Input Tax code (FTXP)

Follow same path as above. Click on

Input country code

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Input tax code and press enter.

Enter description and tax type and press enter.

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Enter the tax percent rate. Press enter. Click on

Input COA on Prompting.

Input GL account and save it.

Alternatively- Use T code OB40, Select the transaction Input Tax (VST) and double click

Input COA on prompting.

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3.1.6 GL Account properties of Tax GL accounts

3.1.7 Post invoice with newly created Tax code

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Make sure to tick calculate tax and tax code newly created.
Make sure that the Expenses GL is made relevant

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4 Value Added tax - Output Taxes

4.1.1 Create Output tax –FTXP

Enter the description and tax type. Press enter

Click on and enter GL account.

4.1.2 Book a customer invoice with new tax code

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5 Tax reports

5.1.1 There are some important reports

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6 Check List
1. Check if the tax procedure is assigned to your country

2. Create an input tax code and an output tax code.

3. Assign GL accounts in FTXP or through OB40

4. Post Customer/Vendor invoice with newly created tax code

5. Understand the difference in transporting tax code configuration

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