Tax determination and chain transactions

Description

In the standard system, tax is determined using condition MWST and access sequence MWST.
The following key is used for accessing:

1. Access: Departure country / Destination country

2. Access: Departure country / Tax class. customer / Tax class. material (domestic
delivery)
3. Access: Departure country / destination country / Tax class. customer / Tax class.
material (export)

The departure country is the country of the delivering plant. The destination country is the
country of the ship-to party. The tax classification is copied from the master data of the
partner functions (to find out about which partner functions the data is taken from, see
'Determining the VAT ID number'). The tax classification of the material is copied from the
material master.

The access options for a suitable condition record have been extended as follows:

1. Change tax country of departure manually in the order header

2. If this field is set, it replaces the departure country in the accesses above with a
condition record for MWST.

CAUTION: The 'Tax classification material' fields are NOT read with the tax departure
country, it is still read with the original departure country !!!

1. Change tax destination country manually in the order header

If this field is set, it replaces the destination country in the accesses above with a condition record
for MWST.

CAUTION: The 'Tax classification customer' and the VAT ID number of the payer and sold-
to party (not the ship-to party) are also read with the tax destination country !!!

1. Requirements for tax determination

The standard requirements 08 and 07 for the 2nd and 3rd access to MWST are been extended.

 Requirement 08: If the departure and destination countries are in the EU and the VAT
registration number is not specified, then this requirement is not met.

 Requirement 07:If the departure and destination countries are in the EU and the VAT
registration number is not specified, then this requirement is not met, even if the two
countries are different.

This means that a transaction within the EU is calculated as a domestic delivery if the partner
does not have a VAT registration number.

1. Set EU triangular indicator manually in the order header

Marks a transaction as 'relevant for EU triangular business simplification guidelines'. The indicator
is forwarded to FI. It is relevant in FI for the EC sales list and the advance return for tax on
sales/purchases.

1. Determining the VAT ID number

The partner function from which the VAT ID number is determined, used to be predefined. This
can now be configured in Customizing. Customer tax classification determination is also linked to
this. The setting is carried out per sales organization, using the 'tax rule' indicator.

Where the setting is BLANK, the following standard priority rules apply:

a) If PY has a VAT ID no. and PY <> SP, then tax number and tax classification
are taken from PY (SH is no longer relevant in this case).
The tax number is taken according to the 'tax destination country'.
b) If a) does not apply:
If SH has a VAT reg. no. or if SP has NO VAT reg. no., then the tax number and
tax classification are taken from SH.
c) If b) also does not apply:
Tax number and tax classification are copied from the sold-to party. The tax
number is taken according to the country of the sold-to party.

For setting 'A', the tax number and the tax classification are generally copied from the sold-to
party.
The tax number is taken according to the 'tax departure country'.

For setting 'B' the tax number and the tax classification are generally copied from the payer.
The tax number is taken according to the 'tax destination country'.

Change system parameters in customizing

"Maintain sales tax-identification number determination".

Changes to the interface

1. Change tax country of departure manually in the order header

2. Change tax country of destination manually in the order header
3. Set EU triangular indicator manually in the order header

Further notes

When changing the tax country of departure, you must make sure that the tax indicator for the tax
determination procedure of the company code country is the same as the tax indicator for the tax
determination procedure of the tax country of destination. This is because the system uses the
company code country in FI to look for the relevant tax record. You must maintain the 'reporting
country' in the characteristics of the tax indicator.

Example: If the tax country of departure is set at 'FR' and the company code country at 'DE' with
tax determination procedures 'TAXFR' for country 'FR' and 'TAXD' for country 'DE'.

Condition record MWST

Departure country: FR
Destination country: ..
...
Tax indicator: A1 (from TAXFR, as departure country = FR)
Rate: 21 %

When forwarding to FI, 'TAXFR' is not accessed, rather 'TAXD', because 'DE' is the company
code country. This means that tax indicator A1 in tax determination procedure 'TAXD' must agree
with tax indicator A1 in tax procedure 'TAXFR'. Reporting country 'FR' must be maintained for A1
in 'TAXD'.

See also the FI release note:

FI - Taxes on sales/purchases: Plants abroad

FI - Taxes on sales/purchases: Plants abroad

Description

Until now, the R/3 system required that all plants assigned to one company code must also be
assigned to the country of that company code.
In terms of the tax procedure, this means that each transaction that cannot be processed in the
company code country from a tax viewpoint must have a separate company code.
Examples:

 Filing tax returns with foreign tax authorities

 Group return for another EU country

This procedure required a great deal of maintenance from companies with numerous foreign
warehouses.
Filing tax returns has now been made simpler for the situations above. Release 4.0 gives you the
option of processing transactions for warehouses, sales offices, or plants abroad in your domestic
company code.

You may use this option for those transactions for which no other reporting requirements besides
tax returns exist in each country currency.

The condition for implementing this solution is that the warehouses abroad are not actual places
of work. If they are, you must still create a separate company code for them.

Function description

To complete the new procedure, the tax code was enlarged to include the tax country attribute.
The tax country is the country for which a tax return must be filed.
The tax country allows you to make settings that diverge from the company code country for the
following:
Calculation of tax base
Calculation of cash discount base
Currency key
Translation rule for tax currency

Restrictions
If you are using more than one calculation schema, you have to make the decision concerning tax
calculation with jurisdiction code for all the schemas simultaneously.

Printout of tax on sales/purchases is not supported at this time.

Installation information

If you used modification solution "Plants Abroad" in 3.0C or 3.0F, you will have to maintain the
entries for registration numbers in table T001N over again.

Change system parameters in customizing

Activate the "Plants abroad" function in the Financial Accounting Implementation Guide (IMG). To
do this, choose Activate plants abroad and Enter VAT registration number of plants abroad .

Keep the following in mind for tax calculation schemas:

The company code can only work with the tax calculation schema assigned
to the country of the company code.
Using more than one tax calculation schemas within one company code
is not possible at this time.

Modification solution "Plants abroad" allows you to assign plants from

different countries to one company code.
This results in additional requirements for the character of the tax
calculation schema for this company code as well as the character of
the tax calculation schema for the countries of those plants assigned
to this company code.

If A is the country of company code X that plants in countries B, C,

D... are assigned to, either of the situations below is possible:

Alternative 1
- One tax schema TAXEUR for countries A, B, C, D, ....
- You define a general tax schema TAXEUR that includes
tax specifics for countries A, B, C, D, ...
- You must define all tax codes (with country assignment)
required in these countries.
Alternative 2
- Different tax schemas for countries A, B, C, D, ...
- Example:
- Country A -> Tax schema TAXA
- Country B -> Tax schema TAXB
- ........
- All tax codes for country A are defined in tax schema TAXA.
- In tax schema TAXA, all tax codes are defined for those
countries required for acquisitions or deliveries to plants
abroad assigned to company code X (with country assignment).
- When K3 is a tax code for country B that is required in a plant
assigned to company code A:
Tax code K3 is defined in tax schema TAXB.
Tax code K3 must also be defined in tax schema TAXA (with country
assignment country B), but the definition of tax code K3 must be
the same in tax schema TAXA as it is in tax schema TAXB.
Recommendation
- SAP advises giving your tax schema the character outlined in
Alternative 1.

Background information:
- For a shipment from Plant B in country B, SD finds tax code s
of the tax schema assigned to country B.
- Tax code s is transferred from the SD to the FI application.
- The FI application interprets tax code s with the tax schema
assigned to country A of company code A.
- It must be ensured that the following is true for countries A
and B when using different tax schemas:
When s is a tax code used in plant B,
- Definition of tax code s in tax schema TAXA
=
Definition of tax code s in tax schema TAXB

Changes to the interface

The possible entries pushbutton allows you to restrict the tax country.

The system checks during document entry whether the tax country is unique in the document.
Only the following exceptions are permitted:

 For incoming payments with tax adjustment for cash discounts, more than one tax
country is allowed, but only one for each automatically generated cash discount item.

 Plant stock transfers from SD across national borders are permitted because a cash
discount adjustment is not necessary (simple G/L account postings).

The following programs were enhanced with a selection option for tax country (this field is only
visible if "Plants abroad" is active):
RFUMSV00
RFASLM00
RFASLD11
RFASLD12
RFWERE00
RFUSVB10

The program for sales/purchases tax returns (RFUMSV00) was enhanced with the option of
displaying or printing values in reporting currency (country currency) instead of local currency.

Further notes

Further information is available in "FI General Topics."

The following release notes describe "Plants abroad" for other applications:

MM : MMM_PUR_40AWIA

Intra-EU trade statistics: 40A_FT_GOV_WIA

SD: SD_40_WIA