What is tax category in SAP SD - Sales and Distribution?

SAP Term: tax category

• Component: SD

• Component Name: Sales and Distribution

• Description: A classification that the system uses to determine country-specific taxes during pricing.

Smart SAP Assistant

• Key Concepts: 
  Tax category is a feature in SAP Sales and Distribution (SD) that allows users to assign a tax code to a customer or material. This code is used to determine the applicable taxes for a particular transaction. The tax category is used to determine the tax rate, the tax amount, and the tax base amount. 
  
  How to use it: 
  The tax category is assigned to customers and materials in the master data. It can be changed at any time, but it must be set before any transactions can be processed. The tax category is then used in the pricing procedure to determine the applicable taxes for each transaction. 
  
  Tips & Tricks: 
  It is important to ensure that the correct tax category is assigned to each customer and material. This will ensure that the correct taxes are applied to each transaction. It is also important to keep track of any changes made to the tax category, as this could affect the taxes applied to future transactions. 
  
  Related Information: 
  For more information on how to use the tax category in SAP SD, please refer to SAP Help documentation or contact your local SAP support team.