TSCM621U06L01

Criteria for Tax Determination
You can assign a rule such as BLANK, A or B, at the sales organization level to determine sales tax identification number in the order and billing document
For the BLANK status, the standard priority rules are as follows
Rule 1
If the payer (PY) has a sales tax identification number and a different sold-to-party (SP), the sales tax identification number and tax classification are taken from PY
The ship-to party (SH) is then not relevant
The system determines the sales tax identification number according to the tax destination country
Rule 2
If rule 1 does not apply, that is if SP does not have a sales tax identification number but SH has a sales identification number, the sales tax identification number and tax classification are taken from SH
Rule 3
If rule 2 does not apply, the sales tax classification number and tax classification are transferred from the sold-to party

For status A, the sales tax identification number and tax classification are transferred from the sold-to party
The sales tax identification number is transferred according to the tax destination country

For status B, the sales tax identification number and tax classification are transferred from the payer by using the same method describe in the rule for status A

Tax Classification
The system determines a tax rate in the order document or the billing document based on the following criteria
The business transaction (domestic, export, or import)
The tax liability of the ship-to party
The tax liability of the material

Tax Determination
You can calculate the taxes in the Sales and Distribution (SD) component by using the normal condition techniques

You enter the condition type for tax into the pricing procedure

The access sequence is used to find the appropriate condition record for the current key combinations

Tax Interfaces
You need to decide when to calculate taxes
The tax procedure is assigned to a country in the basic settings of the Financial Accounting (FI) component
For the United States, you have the following tax procedures
TAXUS
Taxes are calculated in the Sales and Distribution (SD) component
TAXUSJ
Taxes are calculated in the central tax procedure by using the tax jurisdiction value stored in the master data for the ship-to party
TAXUSX
Taxes are calculated through a Remote Function Call (RFC) and a central tax procedure

For jurisdictional and third-party tax calculations, after the procedure is determined, the corresponding pricing procedure in SD uses the appropriate condition types
For example, if the tax procedure assigned to the country is TAXUSJ, pricing procedure RVAJUS uses condition types UTXJ, JR1, JR2, JR3, and JR4
If the central tax procedure is TAXXUSX, pricing procedure RVAXUS uses condition types UTXJ, XR1, XR2, XR3, XR4, XR5, and XR6

Condition type UTXJ initiates the tax calculation
Condition types JR1-4 and XR1-6 receive the jurisdictional breakdown of the tax amounts that are returned from the central tax procedure