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This SAP article will guide you all about “How to Specify structure for tax jurisdiction code in SAP” step by step with screenshots.

In this activity, you determine the structure of the tax jurisdiction code. This code is used for calculating taxes which are defined below the federal level (for example, US taxes, Canadian taxes). The tax jurisdiction code can be subdivided into a maximum of four levels (for example, state/county/city/district). This way the tax rate is defined per level and the tax value is calculated individually per level. If an entry exists for a calculation procedure, then tax processing for this calculation perocedure is switched over automatically to the tax jurisdiction code method.

In this activity you can also set whether taxes should be calculated at the line item or the “tax code/tax jurisdiction code” level.

Activities

1. Enter the name of a calculation procedure for which you need a tax jurisdiction code. You can call up the names of all the available procedures via the F4 key. A calculation procedure is defined for every country in the SAP standard system.


2. Define the structure and the length of the structure elements of the tax jurisdiction codes in the fields defined for this purpose.


3. If taxes are to be calculated at line item level, the “Item-by-item taxes” indicator should be set.

Steps to Specify structure for tax jurisdiction code in SAP

SAP IMG Path: – SPRO > SAP Reference IMG (F5) > Financial Accounting > Financial Accounting global settings > Tax on sales/Purchase > Basic setting > Specify structure for tax jurisdiction code

Transaction Code: – OBCO

Step 1:- Click on “Specify structure for tax jurisdiction code”

Step 2:- Update the following fields

1. Enter the name of the tax jurisdiction code structure


2. Update the description of tax jurisdiction code structure


3. Enter the length of first level, second level, third level and fourth level of hierarchy within your tax jurisdiction code structure.


4. Set the Tax ln indicator to determine taxes on a line by line.


5. Specify structure for tax jurisdiction code

Step 3:- Click on save icon icon to save the configured data .

Now, we have successfully done with “How to Specify structure for tax jurisdiction code in SAP”.