Non-deductible taxes are taxes that are not allowable when calculating a taxable income. They are taxes that have been paid in the process of generating income or purchasing items, but they are not subtracted from the final taxable income. For example,
VAT 14% non-deductible 50%
100 EUR invoice (account 5080)
7 EUR VAT goes to the VAT account
7 EUR VAT goes back to the Expense account (5080)
Total invoice 107.00
Total VAT 7.00
How to configuration this scenario in SAP?
In Tax code A2, Enter 7% in condition type MWAS and 7% in condition type MWVZ.
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This post tries to give a comprehensive guide on SAP FI Tax configuration. Base configuration path in SPRO is SAP Customizing Implementation Guide –> Financial Accounting (New) –> Financial Accounting Global Settings (New) –> Tax on Sales/Purchases. SAP provides pre-defined tax related settings. Below steps just show you how to configuration tax for a new country if necessary.
Step 1. Check Calculation Procedure
Calculation procedures containing the necessary specifications for the calculation and posting of taxes on sales/purchases have already been defined in the standard SAP system for certain countries. Every calculation procedure groups several tax types together into a condition type (for example, output tax or input tax) in the calculation procedure, and determines calculation rules for it. Below screenshot shows the tax procedure TAXD. Read more…
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.
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In sales order processing procedure, the output tax amount is calculated automatically according to the configuration. Below screenshot shows the tax rate is 4% and total tax amount is 28.00 USD based on sales price 700.00 USD.
This article tries to analyze how the tax is calculated from a step-by-step example.
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