How to Create Tax Codes in SAP S4 HANA – FTXP

How to Create Tax Codes in SAP S4 HANA, using T code: FTXP.

Tax Code: It is a 2-digit alphanumeric code that includes tax parameters such as tax percentages, input/output taxes, and other relevant tax attributes. It is created under a specific Tax Procedure and stored in the General Ledger (GL) Master, enabling accurate tax calculations and compliance.

What are Output and Input taxes.

• Output Tax: It is the liability arising from the sale of taxable goods and services, payable to the government.
• Input Tax Credit: It is the tax paid on business purchases, eligible for deduction against output tax liability.

In this blog we are creating below Tax codes.

1. Output Tax – 12% (State GST – 6%, Central GST – 6%).
2. Input Tax – 12% (State GST – 6%, Central GST – 6%).

1. Creation of Output Tax code

Go to T code: FTXP.

Popup will come, give country and click on continue button.

Give the Tax code name that we want to create.

Now popup will come – Give Description, Tax type (A – Output Tax type) and click on continue button.

Now maintain the Output tax – 12% (State GST – 6%, Central GST – 6%).

Click on save button.

Tax code is saved.

2. Creation of Input Tax Code

Go to T code: FTXP.

Popup will come, give country and click on continue button.

Give the Tax code name that we want to create.

Now popup will come – Give Description, Tax type (V -Input Tax type) and click on continue button.

Now maintain the Input Tax – 12% (State GST – 6%, Central GST – 6%).

Click on save button.

Tax code created.

SAP Tax Configuration

• Calculation Procedure of Tax Procedure includes
  • How to Create Access Sequence Keys (OBYZ) in SAP S4 HANA: Click here
  • How to Create Condition Types (OBYZ) in SAP S4 HANA: Click here
  • How to Create Account Keys (OBCN) in SAP S4 HANA: Click here
• How to Create Tax Procedure (OBYZ) in SAP S4 HANA: Click here
• How to Maintain the Tax Procedure at Country Level (OBBG) in SAP S4 HANA: Click here
• How to Create Tax Code (FTXP) in SAP S4 HANA: Click here
• Assign GL Accounts to Account Key (OB40) in SAP S4 HANA: Click here
• How to Maintain Tax code in GL Account in SAP S4 HANA: Click here

SAP FICO Configuration topics:

• SAP Finance Enterprise structure: Click here
• SAP Finance GL Accounting: Click here
• SAP Finance Accounts Payable: Click here
• SAP Finance Accounts Receivable: Click here
• SAP Finance Bank Accounting: Click here
• SAP Finance New Asset Accounting: Click here
• How to Create a Controlling area in SAP: Click here
• SAP Controlling – Cost Element Accounting: Click here
• SAP Controlling – Cost Center Accounting: Click here