Difference between Tax Area and Tax Area Locations

hardik_shah

Can anyone tell me what is the difference between Tax Area and Tax Area Locations in Financial Management Setup ? ? ?

kash387

Hi Hardik,

I m a technical guy so cant explain you exactly....
bt the thing is that Tax Area is a form where you need to define Tax Area Code and all its details...
Tax Area Code such as VAT and CST and they are different as per the states of the country.

You also need to define Tax Jurisdiction Code in lines which contains the Tax Account Number and the calculation formula also.

Whereas, Tax Area Location is the form which you use to coordinate the Tax Area Code with the Locations of your company and also your customers/vendors.
For example, in gujarat we use VAT for the transaction which are dealt in Gujarat.
So we just make an entry for Customer/Vendor in Tax Area Location where we enter our locations and the locations of cust/vendors and as per that we enter the Tax Area Code.

The Tax Area Location is used while you click the menu button 'Function' from Sales Order or Purchase Order for calculating structure order values. So that as per your tax area code, the tax value will be calculated through the Tax Area Location.

I hope you can understand what I want to say.... I dont know how to explain you exactly but this is the basic funda that works behind it.

Thanks