FI / FICOintermediate

FICO Tax Configuration Part 2: Configuring Tax Codes, Conditions and Accounts End to End

Key takeaway

Configure taxes end to end: tax procedure and condition types, tax codes with rates and validity, account keys and GL tax accounts, non-deductible tax, tax jurisdiction where relevant, and testing across purchase and sales postings.

Explanation

📌 KEY POINTS
✅ Tax procedure lines contain condition types (e.g. output tax, input tax) with account keys.
✅ Tax codes store rates per condition type; account keys map to GL accounts in OB40.
✅ Non-deductible input tax uses separate keys so it is added to cost instead of recoverable tax.
✅ Some countries use jurisdiction codes (e.g. US) with regional rates.
⚠️ Transport tax codes consistently across systems — manual creation per system leads to differences.

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▶ WHERE WE ARE
Part 1 explained concepts. Now configuration.

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▶ 1. PROCEDURE AND CONDITIONS

Condition types, account keys, calculation steps.

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▶ 2. TAX CODES

Rates per condition; tax type; target tax code where needed.

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▶ 3. ACCOUNTS

OB40: account keys → GL; posting indicator.

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▶ 4. SPECIAL CASES

Non-deductible tax, reverse charge, jurisdictions.

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▶ 5. TESTING

Purchase and sales invoices; tax reports.

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▶ STEP BY STEP

Create a new tax code in FTXP.
Check its account key in OB40.
Post test invoices and review tax reports.

✅ CHECKPOINT: tax report totals match test expectations.

Code example

ABAP Code

===== CONFIG MAP =====Tax procedure lines: condition types + account keys (e.g. MWS output, VST input, NAV non-deductible)FTXP: country, tax code, type, rate per conditionOB40: account key → GL account (e.g. MWS → 175000, VST → 154000)Transport: tax codes via transport connection (per system strategy) ===== REVERSE CHARGE (concept) =====Tax code posts input and output tax lines that offset each other

Real project scenario

A retail company operating in several countries created tax codes manually in each system; QA and production drifted apart and tests passed in QA but failed in production. Transporting codes consistently and comparing codes across systems fixed it.

Common mistakes

Manual per-system codes.
Missing OB40 entries.
Wrong non-deductible handling.
No test scenarios.
Ignoring reverse charge.

Best practices

Transport codes consistently.
Complete account keys.
Define special cases with tax team.
Test purchase and sales.
Compare systems.

Interview angle

Questions: "How do you create a tax code?", "What is an account key?", "How is non-deductible tax handled?"
Strong answer: procedure lines, codes and rates, OB40, special cases, testing and transports.

Practice this lesson

Quick check

1. Which transaction maintains tax codes with their rates?

2. Tax postings fail at month-end with a tax account error for a new tax code. What is missing?

3. How should non-deductible input tax be treated?

Interview questions

1. How would you apply Tax Configuration in a real SAP project? Walk through the design or implementation approach.

Answer it in your own words first, then compare.

2. What are the most important design decisions, trade-offs, and best practices in Tax Configuration?