plant code and tax classfication

[Former Member]

Hi Guru,

I have a question about tax classification and plant.

In VK11, I created a record for service tax-5%, if customer tax classification is 1, and material tax classification is 2, then the service tax will be triggered authomatically.

However, when I trying to create a sales order, I found the tax rate will change in the light of the sequence of entering plant code:

1. If I enter the plant code when creating sales order, then the correct service tax will be pulled out automatcially, everything looks fine.

2. If I ignore the plant code first, and then enter it after system pop-up the error message, the service tax can not be pulled out automatically, I need to go to condition tab and update the condition maually, then the sercie tax willl be triggered.

Are there some links bewteen plant code and tax setting? How can let the system automatically trigger the service tax eventhough the plant code is not being enter at the first time?

Looking for the expert to solve this problem. Thanks.

[Former Member · Accepted solution]

Hi

In your first case:

The tax rate will be proposed only when the system knows the plant before pricing calculation. While creating sales order if you enter the plant manually and press enter then the system will process few things in the background including the pricing calculation. In this case it knows the plant before processing the pricing calculation.

In your second case:

If you enter the plant manually after the pricing calculation then the system will not redetermine the pricing calculation and get the tax rate. In this case you need to manually update the tax rate in the condition screen at item level by pressing the update button.

The system will check for the plant in sales order to propose the tax rate from the condition record for Tax condition type since the Requirement type 10 - (Plant is set) is assigned to it in the pricing procedure in V/08 tcode.

This is because to determine the country of the plant. Using the country key, the SAP System recognizes which tax type is valid for a plant and thus which taxes are relevant when creating an SD document.

If you want the system to pick the plant automatically when creating sales order then enter the default plant in the delivery plant field available in Shippinf Tab page in the customer master.

Hope this clarifies your doubt.

Regards

Rajkumar K

[Former Member · Accepted solution]

Hi Gurus,

Thank you for all your thorough explanation, now I know the link between plant and tax classification. And I have one more question about this, in the system, we've set up 2 types of tax: VAT and Service tax, the combination of them are:

-VAT: Domestic tax

-Service tax: Country/company code/taxcl1Cust/taxcl.Mat

In the second case, I didn't enter the plant code until system pop-up the erro message, then sales order is pulling in VAT.

If system recognize the country via plant, and then determine which tax type is valid for a plant. I didn't enter the plant code, why it can trigger the VAT in this case?

[Former Member]

In your pricing procedure, you must have maintained 10 (the plant is set) in Reqt column in front of your tax condition (sap standard).

so, if the plant is automatically determined in the sales orders, then you dont get this problem.

tax is maintained at country level. and systems determines the country via plant. so after the system determines a plant, it determines its country and finally the value for the tax.

so, thats the link between plant and tax.

[aramsum]

Hi,

You check If the Plant has been assigned to the sales org and distribution channel properly. Check If the Customer and Material Tax classifications have been maintained. Then check If the Tax condition records have been maintained. If all of these have been maitained, then this should work.

Regards

Ram Pedarla

[Former Member]

Hi,

The Plant has been assigned to the sales org and distribution channel correctly

For the customer tax classification, I've checked the CMD data, it's maintained as 1, however, in sales order-header lever-billing document tab, the "Alt tax classfic" is blank, I assume that it's a default value from CMD setting, and if I enter the plant, then the tax can be trigger automatically eventhough the customer tax classification field is blank.

The tax condition records have been maintained properly.

So I don't what's wrong with that billing document. Pls help

[aramsum]

Hi ,

You do not enter the plant and go to conditions screen at the item level and click on analysis at the bottom and see what it says. It will show why the tax has not been determined. You will find the reason. Kindly please let me know If you need any more Information on this. Alternate Tax classification does not show up in the sales order, you can enter the tax classification manually here. Tax classification from the customer and material master can be seen at the header level and the item level in th billin doc respectively.

Regards

Ram Pedarla

Edited by: RamPedarla on Aug 4, 2009 2:44 PM