Which characteristics are used to determine the sales tax code for general ledger accounting?

Question

Options

• ACountry code assigned to business partner, customer tax code, validity period
• BCountry code assigned to business partner, tax determination ID, validity period
• CCountry code assigned to company code, customer tax code, validity period
• DCountry code assigned to company code, tax determination ID, validity period

• A
  72% (23)
• B
  16% (5)
• C
  9% (3)
• D
  3% (1)

Explanation

Option A is correct because the sales tax code in general ledger accounting is determined by looking at the business partner's (customer's) country code - not the company code's country - since tax liability is driven by where the customer is located or registered. The customer tax code reflects the customer's tax status or classification (e.g., taxable, exempt), and the validity period ensures the correct tax rules are applied for the relevant date range.

Why distractors fail:

• B replaces "customer tax code" with "tax determination ID," which is not the correct field in this determination logic.
• C swaps the business partner's country for the company code's country - a common trap, since tax obligation follows the customer, not the selling entity's home country.
• D combines both errors: wrong country assignment (company code) and wrong field (tax determination ID instead of customer tax code).

Memory tip: Think "Who, What, When" - Who (Business Partner country), What (customer tax code = their tax status), When (validity period). Tax follows the customer's identity, not your own company's.

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