In some countries/regions, the tax isn't recognized when an invoice is issued, but when a payment is made. This is called deferred tax. You can record and transfer deferred tax in the system.
You can process customer and supplier invoices using a deferred tax code. Deferred taxes aren't recognized immediately, but only when the payment is completed. You can then transfer the tax amount to a normal tax account.
The general ledger accountant uses the Transfer Deferred Tax app and the Analyze Deferred Tax Accounts app to display and post deferred tax.
For more information and supported countries and regions for Deferred Taxes, see the SAP Help Portal.
Configure deferred tax codes and target tax codes for processing deferred tax.
To configure deferred tax codes, the following steps are required.
Define Deferred Tax Rules
We first define the rules for processing deferred tax by using the configuration activity Define Deferred Tax Rules (ID: 105345). You can modify existing deferred tax rules in this activity.
Assign Rules to Company Codes
Use the configuration activity Assign Deferred Tax Rules to Company Codes (ID: 106347) to assign the defined rules to company codes. This activity allows you to link the rules created in the previous step to specific company codes.
Define Tax Codes for Sales and Purchases
Deferred taxes require two tax codes for each form of tax:
- Deferred tax code: Used for the deferred tax item
- Target tax code: Used for the normal tax item once recognize
Use the configuration activity Define Tax Codes for Sales and Purchases (ID: 101016) to set up both the deferred tax codes and target tax codes.
This simulation guides you through configuration settings in SAP Central Business Configuration.
Result
After completing the configuration, the Transfer Deferred Tax app transfers deferred taxes from:
- Deferred tax codes to target tax codes
- Deferred tax accounts to target tax accounts