Customer invoice - change of Tax classification required

[Former Member]

Hi, I wonder if you can help with a query. For most customers we invoice outside the UK, we charge a VAT rate of 0%, which is linked to a tax classification in the customer master record (via XD03). In certain scenarios, we have to charge VAT for the same customer, for example if a training course is carried out for a foreign customer but the training takes place in the UK, we have to charge the UK standard rate of 17.5%. The way we have always achieve this, is that when we know we are going to invoice, we would change the tax classification in XD02, and then update the conditions tab on the sales order. This would in turn update the MWST percentage and allow us to charge the VAT, for this sales order only. The customer record would then be changed back to the previous code, once the invoice was issued.

For some reason this now no longer works. We have checked that the tax rates are set in VK13, and this all appears to look ok. The material codes in the sales orders have not been amended in any way so I do not think this is an issue.

This issue only seems to have occurred over the last few months.

Can anyone think of why?

[Former Member]

Hi,

Changing the cust tax classfication in the Invoice may not work every time.

You will have to change the same in the sales order as well.

That ensures that it reflects only for that order not for others.

Doing a detailed analysis in Pricing analysis would give a clue..

What does it say in Pricing analysis?

Best Regards,

Mohan

[jason_barton]

Wendy,

Have to agree that you can control this at the document level. Depending on where thing start (e.g. a contract or sales order, etc.), you could 'override' the tax classification of the customer in the header of the applicable document. Look at Header --> Billing Document --> Alt. tax classification. You can populate the correct entry here for the scenario (e.g. 0). This entry will then be taken as the customer tax classification. For your tax condition type on the line item, you should now see whatever you set at the header as the customer tax classification. Assuming you have the right combination of things, you should get a tax code from your VK13 entry, which should you lead you to a tax or no tax rate in FTXP. We use this as the exception handling case, and it works well.

Please revert if you need more.

Thanks,

Jay

[ivano_raimondi]

Hello Wendy,

I inform you the customer tax classification can be manually changed in the billing document header.

In this way it should not be necessary to update twice the customer master every time.

Could you please try to run the pricing analyis of the billing document and check what is the tax condition found, and with which data ?

Best regards,

Ivano.

[bcrao]

In copy control which pricing type is used? It seems pricing(taxes) again redetermined in invoice

[jpfriends079]

Don't you feel the procedure you are following little to complicated for user when these can easily be determine through Condition record.

I would suggest, you can have 2 different sales area for the training sales in UK and outside (OT) sales.

Then, VAT tax classification

VAT - 0 - Not liable for Tax

VAT - 1 - Liable for Tax

And say, OT is your existing Sales area for the master data with tax classification VAT - 0 - Not liable for Tax. Then you to extend the customer master for UK sales

Sales org - Distri Channel

1000 - UK and there you maintain tax classification as VAT - 1 - Liable for Tax.

Here, we assume material tax classification is UK as VAT - 1 - Liable for Tax and OT is VAT - 0 - Not liable for Tax.

Now add an access to access sequence, say, Sales Org/ DC/ TaxClass1-Cust./ Tax class. material.

And maintain the condition record in VK11, say,

Not Liable for Tax - 1000 - UK - 1 - 1 = 17.5%

Liable for Tax - 1000 - OT - 0 - 0 = 0 %

And accordingly create you sales order with respective sales areas, w/o much manual intervention.

Hope this can assist you.

Thanks & Regards

JP

[Former Member]

I agree with your suggestion, however as we only probably have a handful a year which are in this scenario, the manual process works.

All the tables seem to be set up correctly.

Any other suggestions?

[former_member183879]

Hi Wendy,

Please check the pricing analysis of the problamatic condition type. You will clearly know the tax classification of the customer taken by the sales order. This way you know whether ur change is getting effected in the sales order/invoice or not.

If not taking effect, then find out the change logs in the change customer master. Ideally it should say the change in the tax classification. If there is change in tax classification, then the changed value should be available in the CMR.

Also the country of the Sold to party/ Payer also plays a role in tax classification and tax procedure. If the initial analysis is not giving u any clues, please let us know with ur findings.