US/CANADA Tax issue

[Former Member]

Hi Team,

We are working on CANADA Tax Calculation in US Company code for Canadian customer; we are struggling to implement this process as we have Jurisdiction inconsistence between two countries,

I am going to explain the Business process and what we were implemented and what we are expecting , we need your assistance to implement this process as Tax is more sensitive as well we are trying to implement hybrid process , we would like ensure that no impact due this process implementation

Business Process:-

Company Code: - 1111 (US Company Code)

Sales Org u2013 2114 (Canada Sales Org)

US Plant: - 2110

Canada Plant: - 2114

Customer (Canada):- 10083773

Process: 1 Direct Sale from US Plant 2110 to Customer (Ship to Party) - 10083773 (Canada)

Process: 2 Sale from Canada Plant 2114 to Canadian Customer u2013 10083773.

Requirement: - for the above two scenariou2019s will applied local taxed in Canada (PST and HST)

(PST: Provincial Sales tax and HST : Harmonized Sales tax). System should pick the tax code C4 from TAXCAJ procedure.

Issue: - When we try to release SD Billing document to Accounting document, there we are getting jurisdiction error by conflict the US Jurisdiction code and Canada Jurisdiction code. The issue is that SAP is not picking the tax code C4 from TAXCAJ procedure and its picking from TAXUSX.

Implemented: -

1. We created a new sales org for Canada u2013 2114; This will be used for all domestic Canada sales.

2. we implemented NOTE: -

---

, here we changed the country to pick from Sales Org

3. Created Tax code C4 in US tax procedure as well as Canadian tax procedure.

Jurisdiction Code flow: - Billing document populates the tax jurisdiction code from the customer master (Canada) of the ship-to party to the billing document item. If you post the billing document to accounting, the system transfers this tax Jurisdiction code to the tax data in the BSET (Tax line in accounting document) table but this table will try to get populate tax jurisdiction as per the accounting document and accounting document link with US TAX Procedure

US tax Jurisdiction Code different than Canada Tax jurisdiction code, moreover here we are using AVP external Tax system for US, we need to check impact from AVP side

Jurisdiction Code in Canada Customer Master

Error:-

Tax statement item missing for tax code AA

Jurisdiction Code Structure for US and Canada

Table TTXD ( Structure of Jurisdiction code) , in SD Invoice Jurisdiction code will pick from customer master as per CANADA Structure, program will try fill the same data in Table BSET and BSET will try to validate company country Jurisdiction code structure

Jurisdiction Structure:-

TAXUSX Jurisdiction Length is 9 Digit

TAXCAJ Jurisdiction length is 4 Digit

Risk: - Our process will work by synchronizing the Tax jurisdiction code both countries , here we cannot change straight away .

We would like to request, how we can populate Canadian tax codes in 1111 accounting document.

Thanks

[Former Member]

Hi,

We have a similar scenario. Please let us know what are the steps performed to calculate Canadian Tax while silling from US Company Code (either through their warehouse in canada or directly through US Warehouse).

Thanks

Anand

[fernando_evangelista]

Hi suresh,

You may have error FF805.

Usually, the FF805 error is triggered due to configuration in the

Pricing Procedure. Review Note No.112609 carefully.

In the pricing procedure ZQFPCA, the tax condition CTXJ references the

subtotal 'Net Before Tax' (From-step = 545).

The non-tax conditions ZC00, ZP00, ZF10, ZAAD, ZP02, ZLFN, ZPFN, ZHFN,

ZESP and ZEXF gets the tax code from tax condition CTXJ in accordance

with note 112609: The conditions of a billing document are read from top

to bottom. As soon as an active tax (in this case CTXJ) is read, the

system transfers the tax code of this tax into all non-tax conditions

with step number lower than the "To-step" (= "From-step" = 545) of the

tax condition which are not statistical.

In the SD-FI interface, when the billing document is released to

accounting, for every price condition sent over, there MUST be a tax

item sent over.

Note 400766 explains the checks performed by the

system on the Tax codes:

1. system checks whether there is a revenue line for each tax line.

2. in the reverse case, for each revenue line containing a certain

tax indicator there must be a tax line with this indicator.

If the tax condition has condition value zero and condition base

value zero, then it is not transferred to FI.

If you have revenue lines containing a tax indicator XX, but no

tax line with tax indicator XX, then the error FF805 issues, and

it is justified. => Please check these informations. I have attached

notes for further information.

IN SUMMARY:

-> There must be at least a revenue line for each tax line.

-> For each revenue line containing a certain tax indicator there

must be a tax line with this indicator.

-> If a tax condition has base value = 0 OR is inactivated OR is

statistical => then it is not passed to FI.

If you want to post a tax exemption, then the tax rate (KONV-KBETR)

should be determined with a zero percentage. BUT the tax base has to be

determined with the invoice value !!!

That tax base is needed later for the tax reporting, as reporting needs

to know for what sales volume the tax exemption took place.

Kind Regards,

Fernando Evangelista

[robertmcgaffic]

Please append the note number you used to accomplish this.

In the section Implemented, you wrote the following:

2.  we implemented Note:

------------------------------------------------------------------------------------------------------------------------

here we changed the country to pick from the sales organization.

For the benefit of other forum readers, can you share your note number with us.

We were unable to find it, and had to resort to a user exit to fix the issue

when a US plant ships to a Canadian customer for a Canadian sales organization,

when we want to apply Canadian sales taxes, not US sales taxes.

Thanks,

Bob