What is tax type in SAP SRD-MD-BP - FDN-Business Partner?

SAP Term: tax type

• Component: SRD-MD-BP

• Component Name: FDN-Business Partner

• Description: The category of tax that correlates to a specific tax number. For example, Value Added Tax VAT is the tax type, Value Added Tax Number is the identifier assigned to the enterprise by the tax authority.

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• Key Concepts: 
  Tax type is a classification of taxes that are used to determine the tax rate for a particular transaction. In SAP, tax types are used to define the tax rate for a business partner. The tax type is determined by the country and region of the business partner. 
  
  How to use it: 
  In SAP, the tax type of a business partner can be set in the SRD-MD-BP FDN-Business Partner Tax Type component. This component allows you to set the tax type for a business partner based on their country and region. Once the tax type is set, it will be used to determine the applicable tax rate for any transactions with that business partner. 
  
  Tips & Tricks: 
  It is important to ensure that the correct tax type is set for each business partner in order to ensure that the correct tax rate is applied to transactions. It is also important to keep in mind that different countries and regions may have different tax rates, so it is important to check the applicable rates before setting the tax type. 
  
  Related Information: 
  For more information on setting up and managing tax types in SAP, please refer to the SAP Help documentation.