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The tax in sales order is automatically posted into corresponding tax account when the billing document is released to FI. This post tries to explain how to make the settings for automatic posting of taxes.

1. Configure the calculation procedure

The tax calculation procedure is defined exclusively for each country. Each calculation procedure contains several tax types which is the same as the pricing condition type from technical point of view. The tax type determines which account key is used to post the tax.

The account key enables the system to post amounts to certain types of revenue account. For example, the system can post freight charges (generated by the freight pricing condition) to the relevant freight revenue account.

Below screenshot shows the account key is MW1 for condition type JR1 in calculation procedure TAXUSJ.

The calculation procedure is assigned to a specific country afterwards.

2. Define Tax Accounts

Go to IMG Path: SAP Customizing Implementation Guide-> Financial Accounting (New) -> Financial Accounting Global Settings (New) -> Tax on Sales/Purchases -> Posting -> Define Tax Accounts.

Double click transaction MW1 and enter the Chart of Accounts 0010 which is used in the company code BP01.

You can distinguish tax accounts by tax codes. That is, you can determine whether for a tax transaction represented by an account key, a single tax account should always be posted to, or separate accounts according to the tax code in each case.

The automatic account determination is used widely in the integration of FI with other modules. You can find more useful information from below links.

Configure Automatic Postings
Automatic Account Determination