To define default tax codes

In many countries, different tax rates apply to transactions within the country and transactions across country borders. In addition, special tax rules can apply to freight invoices.

To define the default tax codes for the various types of transactions, take the following steps:

  1. Set up the tax codes as described in Setting up tax registration. You must define a tax code for each tax rate in each country.

  2. In the Tax Handling (tctax0138m000) session, specify the default tax codes in each country. If a tax code applies to a specific item, you must specify the item. LN applies the tax codes with an empty Item field to all the items for which you do not define specific tax codes.

    For domestic tax, the search path for the tax code includes the tax codes of the item data. For more information, refer to Item tax codes for domestic tax.

You can define default tax codes for the following types of tax:

Item tax codes for domestic tax

For domestic tax, you can also link default tax codes to items or item groups in the following sessions:

  • Items - Sales (tdisa0501m000).
  • Item - Purchase (tdipu0101m000).
  • Item - Sales Defaults (tdisa0102s000).
  • Item - Purchase Defaults (tdipu0102m000).

LN uses these tax codes if you do not define a specific domestic tax code for the item in the Tax Handling (tctax0138m000) session.

Default tax codes for financial transactions

For transactions that you create in Financials, you can link a default tax code to a ledger account.

In the Chart of Accounts (tfgld0508m000) session, select the default tax code in the Default Tax Code field. For example, this is the default tax code for journal vouchers that you create for the ledger account.

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