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    Concept of Tax Jurisdiction Code

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    SOUMEN DAS
    Tax jurisdiction codes are used in SAP to identify the tax authority and rates applicable for a transaction based on its location. Each tax authority is represented as a tax jurisdiction code. The tax jurisdiction code structure is defined to include codes representing the state, county, city, and district to uniquely identify the tax region. Tax percentages are maintained in combination with the tax code and jurisdiction code. When a document is entered, SAP identifies the applicable jurisdiction code based on the parties and objects involved in the transaction, such as the vendor, customer, order, or cost center master data.

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    Concept of Tax Jurisdiction Code

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    SOUMEN DAS
    438 views4 pages
    Tax jurisdiction codes are used in SAP to identify the tax authority and rates applicable for a transaction based on its location. Each tax authority is represented as a tax jurisdiction code. The tax jurisdiction code structure is defined to include codes representing the state, county, city, and district to uniquely identify the tax region. Tax percentages are maintained in combination with the tax code and jurisdiction code. When a document is entered, SAP identifies the applicable jurisdiction code based on the parties and objects involved in the transaction, such as the vendor, customer, order, or cost center master data.

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    Concept of tax jurisdiction code

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    Tax jurisdiction codes are used in SAP to identify the tax authority and rates applicable for a transaction based on its location. Each tax authority is represented as a tax jurisdiction code. The tax jurisdiction code structure is defined to include codes representing the state, county, city, and district to uniquely identify the tax region. Tax percentages are maintained in combination with the tax code and jurisdiction code. When a document is entered, SAP identifies the applicable jurisdiction code based on the parties and objects involved in the transaction, such as the vendor, customer, order, or cost center master data.

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    438 views4 pages

    Concept of Tax Jurisdiction Code

    Uploaded by

    SOUMEN DAS
    Tax jurisdiction codes are used in SAP to identify the tax authority and rates applicable for a transaction based on its location. Each tax authority is represented as a tax jurisdiction code. The tax jurisdiction code structure is defined to include codes representing the state, county, city, and district to uniquely identify the tax region. Tax percentages are maintained in combination with the tax code and jurisdiction code. When a document is entered, SAP identifies the applicable jurisdiction code based on the parties and objects involved in the transaction, such as the vendor, customer, order, or cost center master data.

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    Concept of tax jurisdiction code & tax

    jurisdiction structure
    As we know, each country has a tax procedure. Tax procedure is a list of tax condition types and each condition type
    represents a type of tax.

    Tax percentage against each tax condition type is maintained in tax code.

    Why is the need for tax jurisdiction code?


    In USA, tax authority is different for each area and tax authority decides tax percentage in that area. Hence the tax
    percentage applicable on a business transaction depends upon which area the transaction belongs to (tax to be paid
    to which tax authority).

    Sap handles this requirement by using concept of tax jurisdiction code. Each tax authority is created as a tax
    jurisdiction code in sap.

    Tax jurisdiction structure

    Since tax jurisdiction code is to identify which area or which tax authority is involved in business transaction hence by
    looking at tax jurisdiction code you should be able to identify the area.

    Hence tax jurisdiction code is created in such a way that it answers below

    Which state?

    Which county?

    Which city?

    Which district?

    Tax jurisdiction code is composed of codes which represent state/ county/ city/ district.
    3 alphanumeric digits representing state

    2 alphanumeric digits representing county

    4 alphanumeric digits representing city

    3 alphanumeric digits representing district

    Tax jurisdiction code = (State + county + city + district)

    Defining how many characters which represent state, how many characters represent county, how many characters
    represent city and how many characters represent district is known as tax jurisdiction structure.

    Composition of tax jurisdiction code is knows as tax jurisdiction structure.

    Before creating tax jurisdiction code, tax jurisdiction structure has to be defined in the system.

    How is tax percentage maintained when tax jurisdiction code is used?


    Tax percentage against tax condition types is maintained in combination of tax code and tax jurisdiction code.
    In a business transaction, how system decides tax jurisdiction code?
    Entered document has company code. Company code leads to country, country leads to tax procedure. Procedure
    has condition types but tax percentage for condition types is maintained in combination of tax code and tax
    jurisdiction code.

    When document is entered, tax code is input but jurisdiction code is not input. So how does system identify which
    jurisdiction code to use?

    System fetches tax jurisdiction code from

     Involved parties in the transaction like vendor master, customer master


     Objects involved in transaction like internal order master, cost center master, profit center master.

    Note: Tax jurisdiction code is maintained in vendor master, customer master, internal order master, cost center
    master, profit center master etc.

    Finally I found out that even if you put values in xvbadr, this table is not used for the database update but instead
    values in memory are taken to update the database.
    To solve this problem, I updated directly the values stored in memory.
    Here is the logic:
    1- Go to user exit MV45AFZZ-userexit_save_document to write your code
    2- Call function 'ADDR_GET_COMPLETE' in order to get the actual values of the address
    3- Change the desired values
    4- Update the address with function 'ADDR_UPDATE'
    Sample of the code:
    **Used in address update
    DATA: gd_ret_code LIKE szad_field-returncode,
    gd_err_tab LIKE addr_error OCCURS 10 WITH HEADER LINE.
    **Used to get actual address
    DATA: gd_addr1_complete TYPE szadr_addr1_complete,
    gd_addr1_tab_line TYPE szadr_addr1_line.
    **Used to update actual address
    DATA: gd_final_values LIKE addr1_data.
    CALL FUNCTION 'ADDR_GET_COMPLETE'
    EXPORTING
    addrnumber = xvbadr-adrnr
    addrhandle = ''
    IMPORTING
    addr1_complete = gd_addr1_complete
    EXCEPTIONS
    parameter_error = 1
    address_not_exist = 2
    internal_error = 3
    OTHERS = 4.
    READ TABLE gd_addr1_complete-addr1_tab INTO gd_addr1_tab_line
    WITH KEY nation = space.
    IF sy-subrc EQ 0.
    gd_final_values = gd_addr1_tab_line-data.
    ENDIF.
    **Set jurisdiction code to expected value
    gd_final_values-taxjurcode = 'My Tax Code'.
    **Update address in memory
    CALL FUNCTION 'ADDR_UPDATE'
    EXPORTING
    address_data = gd_final_values
    address_handle = ''
    address_number = xvbadr-adrnr
     DATE_FROM = '00010101'
     LANGUAGE = SY-LANGU
     NATION = ' '
     CHECK_EMPTY_ADDRESS = 'X'
    IMPORTING
    address_data = gd_final_values
    returncode = gd_ret_code
     DATA_HAS_CHANGED =
    TABLES
    error_table = gd_err_tab
    EXCEPTIONS
    address_not_exist = 1
    parameter_error = 2
    version_not_exist = 3
    internal_error = 4
    OTHERS = 5.
    https://archive.sap.com/discussions/thread/489086

    A053 - Taxes Using Jurisdiction Code

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