Setting up sales tax

Before you can set up the tax registration, you must define the necessary data for sales tax.

To set up sales tax To set up sales tax, take the following steps:

1. Parameters

   • In the Parameter Allgemeine Daten (COM) (tccom0000s000) session, select the Versteuerung nach Zielort anwendbar check box.
   • In the Länder (tcmcs0110s000) session, select the Steuerbefreiung drucken check box. If the country is the tax country of an order or invoice, LN prints the certificate number on the orders and invoices.

2. Set up the tax codes and other tax details

   Set up the required tax codes and tax rates as described in Setting up tax codes by country. For sales tax, you must usually set up multiple tax rates.

   Define tax codes for the lowest level tax jurisdiction that you must report. For example, if sales tax is levied by the city, the county, and the state, you must define tax codes for the cities. If no sales tax is levied by the city level, but county and state sales tax apply, you can define tax codes for the counties.

   If you use a tax provider, LN only uses the tax codes to determine the ledger accounts to which the tax amounts are posted. LN sets all tax codes to singular tax during implementation of the tax-provider interface. The tax provider determines the tax rates and the jurisdictions.

3. Assign the tax codes to the GEO codes of the destination addresses

   If you do not use a tax provider, LN uses the GEO code of the ship-to address to determine the tax code of a transaction.

   In the Steuercodes nach GEO-Code (Am.) (tcmcs1136m000) session, assign the tax codes to ranges of GEO codes per country.

   For tax codes used for purchases, you can set up direct pay tax. You must set up a direct pay tax code as tax exception as described in the next step. To print the direct pay certificate number on the purchase invoice, enter the certificate number in the Befreiungsurkunde field of the Steuerausnahmen nach Land (tctax1100m000) session.

4. Define sales tax exceptions

   Use the following sessions, as applicable:

   • Ausnahmen bei Besteuerung (tcmcs1138m000)

     To define tax code exceptions by ship-from or ship-to business partner and item or item group.

   • Ausnahmeregelungen nach Entstehungsort der Steuer (Am.) (tcmcs1139m000)

     To define exceptions by ship-from address GEO code and order acceptance address GEO code.

   • Steuerausnahmen für Service-Buchungen (tctax1170m000)

     To define exceptions for the GEO codes of service order delivery addresses.

   • Steuerausnahmen für Service-Verträge (tctax1175m000)

     To define exceptions for the GEO codes of work site addresses.

5. Set up tax exemptions

   For business partners or transactions that are exempt from sales tax in specific jurisdictions, you can set up exempt tax codes. For more information, refer to Setting up tax exemptions.

6. Test the tax structure

   Use the Steuersystem prüfen (Am.) (tcmcs1199m000) session to verify that you defined the tax codes correctly. You can enter various transaction details and GEO code address information. LN displays the most specific tax code that results from the search path through the default tax codes, tax code exceptions, and tax code exemptions.