Define Tax Procedure in SAP S/4Hana

Each country consists of different types of taxes and tax procedure is defined for each country level in the SAP system. The tax procedure consists of control data that are required to calculate and post the GST tax on Sales and Purchases.

Tax Procedure is one of the important configuration processes that we need to define in SAP. Based on the tax procedure, the tax codes are created in SAP (T-Code FTXP).

To full fill the requirements, we need to do configuration settings in Tax Procedure

  • Condition types are updated along with account keys for GST
  • All the Input GST and Output GST condition types must be assigned here.

Configuration Steps

You can define the GST tax procedure in SAP S/4HANA by using the following configuration steps

  • IMG Menu Path: IMG > Financial Accounting > Financial Accounting Global Settings > Tax on Sales/Purchases > Basic Settings > Check Calculation Procedure > Define Procedure
  • Transaction Code: OBQ3

Step 1: Execute the transaction code “OBQ3” in the SAP command field and enter to continue

Step 2: On the change view Procedure screen, click on the “New Entries” button to define the new GST Tax Procedure in the SAP S4HANA system.

Define new GST Tax Procedure in SAP Hana

Step 3: On the new entries Tax procedure screen, update the following details

  • Procedure: Enter the new key that identifies the GST Tax procedure in SAP
  • Description: Update the description of the tax procedure key.

Select the procedure key and double-click on the procedures-control data.

GST Tax procedures control data in SAP Hana

Step 4: On the change view “Procedures – Control Data“ overview screen, click on the “New Entries” button

GST Tax Procedure - new entries in SAP Hana

Step 5: On new entries of Tax Procedure – Control Data, update the following details.

  • Step: Step determines the sequence of the conditions
  • Condition Type: Update the condition type. For step 100, we have provided BASB (Base Amount), so that the tax is calculated based on the base amount,
  • From: For Step 200 Step, we have provided 100 (means the tax are to be calculated based on Base Amount)
  • Account Key: Update the account key for the condition type. Based on the account key, the S4 Hana system posts the GST amount to the particular G/L accounts.

Define Tax Procedure in SAP Hana

Click on the save button and save the tax procedure in the SAP S4 Hana system.