Understanding Tax Areas

The tax area is a code that represents a tax structure, and includes a start and end date. Each tax for a tax area has its own characteristics, such as calculation method, tax minimum, and account. The system maintains a relationship between the standard tax areas and the country-specific tax areas.

Each tax can have only one minimum (such as the IIBB). Therefore, you must split the tax into as many codes as there are required minimums.

You set up country-specific tax areas in the standard Tax Rate/Areas program (P4008), and then you create a tax group with the same name in the Tax Groups program (P76A15).