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Create New Tax code in SAP

T.code FTXP is used to create Tax code.

All the Taxes are divided into two categories.

  • Input tax: All taxes related to purchase are considered as Input tax.
  • Output tax: All taxes on sales come under this category. For e.g CST, service tax, VAT

T.code FTXP is used to create both input or output tax code.

Steps to create Tax code:

2. Enter 2 digit alphanumeric code for e.g  A8, 46, CC, etc.. in the field Tax code. Now SAP will ask you to complete other additional fields such as:

  • description of the tax code (give a description)
  • define the tax type (tax code is input or output tax)
  • Eu code: Set this parameter at “1” it represents all the Sales from one EU country to another EU country. If you do not set this parameter at “1” then all transactions with this code will be not picked up in the ESL listing of that specific country.

Base Amount, Input tax, Output Tax … 

4. Account Keys.  

  • NVV: The non-deductible VAT is automatically added to the expenses account
  • NAV: Indicate for this key a separate account for the non-deductible VAT
  • ESA: Output tax in case of Acquisition of EU goods
  • ESE: Input tax in case Acquisition of EU goodsLast but not least you also need to complete the tax rate field.

  • Non-deductable: Used JVRN for  Non-deductable.
  • Deductable: Used JVRD for deductible.
    For JVRD, Go to OB40, maintain G/L acct for JP5
    GL accounts has to be assigned under OB40 for automatic posting of tax amounts.

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