C_TS4FI_2023 · Tax Processing · ~12% of exam
Tax Processing
Tax codes, input/output tax, advance tax returns, and jurisdiction codes — all Tax Processing topics tested in C_TS4FI_2023.
Key Concepts
Tax Code
Two-character key that defines the tax rate and type (input/output). Assigned on each vendor/customer invoice line. Country-specific — each country has its own tax codes.
Input Tax (Vorsteuer)
Tax paid by company when purchasing. Recoverable in most countries (VAT). Posted to input tax GL account. Tax code type: V (Vorsteuer in German).
Output Tax (Umsatzsteuer)
Tax charged to customers when selling. Must be paid to tax authority. Posted to output tax GL account. Tax code type: A (Ausgangsteuer).
Tax Jurisdiction Code
Used for US sales tax (not VAT). Hierarchical code (state + county + city). Assigned to plant and customer. Determines exact tax rates via external tax system (Vertex, Avalara).
Advance Tax Return
Periodic report sent to tax authority showing input/output tax balances. Generated from posting data. Transaction S_ALR_87012357. Must be done before clearing tax accounts.
Tax Base Amount
Net invoice amount on which tax is calculated. Different from gross amount. Important: tax is always calculated on the net base, not on other tax amounts (no tax-on-tax).
Transaction Codes (T-Codes)
| T-Code | Description |
|---|---|
| FTXP | Maintain tax codes (rates, account keys) |
| OB40 | Assign GL accounts to tax account keys (VST, MWS...) |
| FB41 | Post tax manually |
| S_ALR_87012357 | Advance return for tax on sales/purchases |
| F.18 | Reconcile advance return with tax accounts |
Key Rules to Remember
Tax code V0 = 0% input tax (not tax-exempt — still triggers tax check), A0 = 0% output tax
Tax-exempt transactions use special tax codes (e.g., U0 for exempt purchases)
Tax amounts are always posted automatically — manual tax posting (FB41) only for corrections
For EU intra-community transactions: acquisition tax (self-assessed, both input and output posted simultaneously)
Config Paths (SPRO)
SPRO → Financial Accounting → Financial Accounting Global Settings → Tax on Sales/Purchases → Calculation → Define Tax Codes
SPRO → Financial Accounting → Financial Accounting Global Settings → Tax on Sales/Purchases → Posting → Define Tax Accounts (OB40)
SPRO → Financial Accounting → Financial Accounting Global Settings → Tax on Sales/Purchases → Basic Settings → Assign Country to Calculation Procedure
Exam Traps — Common Mistakes
Tax codes are country-specific — a tax code defined in DE cannot be used on a company code with country FR.
Account key MWS = output tax, VST = input tax. These are the standard SAP keys assigned in OB40.
Non-deductible input tax: portion of input tax not recoverable (e.g., 50% non-deductible). Posted to expense account, not recoverable tax account.
Calculation procedure (TAXD, TAXUS, TAXFR...) is assigned to country — not to company code. Company code inherits it via country setting.