Hi,<br>
<br>
When a transaction requires a country tax treatment but the source country in the transaction is different, the system will pick the FI tax procedure of the plant country to apply the rates into SD pricing. While in accounting it would use the FI Tax procedure of the Company Code country. <br>
E.g. The plant country is located in the US but the sale is made in Canada, the system will use the tax procedure of the sourcing plant (in this case US) even though the company code is in Canada. That raises an issue when the tax procedures are different.<br>
<br>
We can only assign one tax procedure to a country and one country to a company code. Therefore, we have to find a way to derive a Canadian tax treatment when the company is doing business in the Canadian jurisdiction and a UK tax treatment when the company is doing business in the UK jurisdiction. This kind of issue is valid for any country having basic differences between their respective tax pricing procedures (i.e. US vs. Canada vs. any EU countries).<br>
E.g. CA company processing US Tax related transaction<br>
US company processing CA Tax related transaction<br>
<br>
For US, we use Taxware.<br>
For CA, we do not have an external system but we use the jurisdiction codes.<br>
For EU countries, we use the standard SAP design.<br>
<br>
For CA tax codes, which are set up in FTXP with Tax Jurisdiction the rates are variable depending on the jurisdiction they are set up for.<br>
In case a US company would require triggering a CA tax treatment, we have a conflict as there is no Tax jurisdiction in FTXP for the US company Code Country FI Tax procedure and the correct rate can not be identified using a single tax code.
This would mean that separate tax codes must be created for each different Canadian tax rate in the US Tax procedure, undoing the beneficial design of having Tax jurisdiction active in the CA FTXP set up.<br>
<br>
For CA companies triggering a US tax treatment, a similar issue arises.<br>
The company code country (CA) FI Tax procedure using jurisdiction code set up, would require calling Taxware to find the rate. Conflict will occur between internal jurisdiction required to go into FTXP and the jurisdictions required for TaxWare.<br>
<br>
We would have the same kind of issue for EU companies requiring a CA/US tax treatment. The tax procedure of EU company codes is neither using jurisdiction code nor calling Taxware. Therefore when a EU needs a CA/US tax treatment, it would respectively need either a jurisdiction code or a call to Taxware but is unable to do so. Therefore, we would not be able to get a tax rate in the sales document.<br>
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Would anyone have any suggestions regarding how to handle the taxes for those cases ?<br>
<br>
Thanks,<br>
Yves
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