Tax question with CATS and RRB

[derekvincent]

Hello all,

We are trying to setup our business process for that for order to cash (in a services industry) and are having some specific issue regarding taxation. Our process follow standard SAP fairly closely we create Sales Contract per engagement for the required resource, then the resources enter their time in CAT2 against the sales contract/line item we move the time entered to controlling (with CAT7) then use DP91 to create our billing document and then invoice.

The issue we have is that our provincial sales taxes is dependent on the work being rendered in IT industry. So tasks documentation, project preparation, project management are not taxable tasks while "work that adds value" to a customers system/environment such as writing code or doing some setup work. Currently we tend to track the type if work done per day on our current manual time sheets (so Monday - 8h - Project prep, Tuesday 8 hours development).

I am wondering if it is possible to setup some activity or work types that can be used to set the type of work rendered for the day or entry that would in effect control if the provincial sales tax is applied to that item when it is transferred to controlling or used in DP90...

Cheers,

Derek.

[jason_barton · Accepted solution]

Derek,

Living and breathing what you are talking about in our system right now. Specifically in our Canadian entity, and in the provinces of Saskatchewan and Manitoba, this issue comes up. The way were are handling it is via USEREXIT_XKOMV_FUELLEN_O_KONP in RV61AFZB. We are influencing the tax flag on the material master. For example, we have case in Saskatchewan where we only want PST to be derived for labor activties. We achieve this by focussing on material group (komp-matkl). Basically, we update the komp-taxm1 value to indicator other than which is derived from the material master. This in turn picks up other record in VK12 for CTXJ, which in turns applies different tax code in FTXP deriving the taxes we wish.

We also have case where we focus on the plant (komp-werks) and the profit center (komp-prctr). Anyway, hopefully you get the essence of what we have done.

Please revert back if you need more details or thoughts.

Thanks,

Jay

[derekvincent · Accepted solution]

Jay, I will certainly look into it but I am afraid that it might be a little different.... The issue we have is we have a single material we use in our contract for consulting but based on the type of rendered (needs to be set by the consultant when doing time sheets in CAT) it will affect the entery for the specific entry/day in the timesheet and billing... so in effect in a 40 hours week if billing for a resource 24 maybe development and 16 is documentation... this means we only should be charging taxes on the 24 hours and not the full 40...

I will dig and see if this get me close thank you very much...

Derek.

[jason_barton · Accepted solution]

Derek,

What is the field that differentiates the split in hours? If I understood how the split (e.g. 24 hours to development and 16 hours to something else) is derived or more to the point recorded, might be able to help further. Let me know.

Thanks,

Jay

[derekvincent · Accepted solution]

Right now that is part of overall question... It would need to something in the CAT2 transaction (might need to create a custom field) that can be used to track the type of task performed that day (or period partial day etc.). So in CAT2 the resource would go in and enter somethig like the following:

Activity | Sales Order | Item | 09/01 | Tax | 09/02 | Tax | 09/03 | Tax | 09/04 | Tax | 09/05 | Tax

8 | 40000023 | 10 | 8H | Y | 8H | Y | 8H | Y | 8H | N | 8H | N

(The tax fields do not actually exist in CAT2)

So from the example we can see the 24 hours should have PST applied and 16 should not.

Derek

[jason_barton · Accepted solution]

Derek,

What about booking your time to Network / Actiivity and maybe even sub-operation? Maybe use of Attendance / Absence type to segregate your time allocation?

Or maybe seperate material codes for type of time - e.g. Z000000001 and Z000000002, would have to set your material determination in DIP config to point to respective material codes.

Challenging whatever way you go, but really think you have to keep tax info downstream of the HR process, kind of risky in my mind. Just food for thought. Maybe opportunities in user exits in RRB, I will have a look there as well.

Let me know how you make out though.

Thanks,

Jay