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

SAP Term: tax classification

• Component: SD

• Component Name: Sales and Distribution

• Description: A specification of the tax liability of the customer based on the tax structure of the customer's country.

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• Key Concepts: 
  Tax classification is a feature in SAP Sales and Distribution (SD) that allows users to assign tax codes to customers and materials. This helps to ensure that the correct taxes are applied when creating sales orders and invoices. Tax classifications can be based on country, region, or other criteria. 
  
  How to use it: 
  In order to use tax classification in SAP SD, users must first define the tax codes that will be used. This can be done in the Customizing menu under the Tax on Sales/Purchases section. Once the tax codes have been defined, they can be assigned to customers and materials in the master data. 
  
  Tips & Tricks: 
  When assigning tax codes to customers and materials, it is important to make sure that the correct code is used for each item. This will help ensure that the correct taxes are applied when creating sales orders and invoices. 
  
  Related Information: 
  For more information on tax classification in SAP SD, please refer to the official SAP documentation.