What is 'tax code' in SAP FI - Financial Accounting?

tax code - Overview

• Component: FI

• Component Name: Financial Accounting

• Description: A two-digit code that represents the specifications used for calculating and displaying tax. Examples of the specifications defined under the tax code are: Tax rate Type of tax input tax or output tax Calculation method percentage included or percentage separate

tax code - Details

• 
  Key Concepts: 
  A tax code is a unique identifier assigned to a specific tax rate or type of tax. It is used to determine the amount of tax to be paid on a transaction. In SAP Financial Accounting (FI), tax codes are used to assign the correct tax rate to a transaction. 
  
  How to use it: 
  In SAP FI, tax codes are used to assign the correct tax rate to a transaction. The tax code is entered in the relevant field when creating or editing a transaction. The system then calculates the amount of tax due based on the assigned tax code. 
  
  Tips & Tricks: 
  When entering a tax code, make sure that it is correct and up-to-date. If the wrong code is entered, it could result in incorrect calculations and incorrect taxes being paid. 
  
  Related Information: 
  For more information on SAP FI and tax codes, please refer to the SAP Help Portal or contact your local SAP support team.