VAT Number link to Customer tax clasification

[Former Member]

Dear All,

Give your some inputs on VAT number and Customer tax classifications for MWST determination in sales order,

Please check sales orders in scenrio's

1. VAT number not given in customer master in general data - Sold to party.

SON - 1 where MWST is 0 %, customer tax classification is "0" condition record found - Sale org/plant/destination country/cust tax clas/mat tax clas

2500/1000/FR/0/1 - 0 %

2. VAT number is given in customer master in general data - Sold to party

SON - 2, Where MWST is 19.6 %, customer tax classification is "1" condition record found - Sale org/plant/destination country/cust tax clas/mat tax clas

2500/1000/FR/1/1 - 19.6 %

Where can i check that link between VAT number and customer tax clasification?

Regards

Ramakrishna.P

[reazuddin_md · Accepted solution]

Check,

IMG-SD-Basic functions - Taxes - Maintain Sales Tax Identification Number Determination.

read the help before proceeding .

Hope it clears.

[Former Member · Accepted solution]

Daer Reazuddin MD

Thank you, you solved my issue. rewarded fully.

Thanks

Ramki

[Former Member]

Hi

In fact there is no link between VAT number and customer tax classification. See my explanation below

1. Customer tax classfication is used to determine whether the customer should be taxable or not together with tax codes maintained in FTXP. For e-g Cust tax classification 0 means no tax which is why in your first case there was no tax in the sales order. In your second sales order, cust tax classification was "1" which means full tax and that is the reason your second sales order had outout tax 19.6%. Condition records for taxes are maintained like this (please mind that this is only an example, there could be several access sequences maintained as per the business requirement)....Tax classification 1 then tax code say U1 which means 19.6%, Tax classification 0 then tax code A0 which means 0% tax.

2. Now coming to the VAT number. This is generally filled in the customer master control data to print it on the invoices. VAT number is more of a legal procedure that this is checked when there is a movement of goods. So if you have a look at European invoices, you will find both seller's and buyer's VAT numbers on the invoice. Secondly, VAT number also exempts VAT for the buyer if the both the transaction occurs within the EU and only if the buyer produces VAT number while placing the order or may be before invoicing is done.

Hope this helps

Thanks

Chandra Kiran