Company Code Country Used for Tax Calculation

[Former Member]

Hi,

I'm creating a sales order with the company code in Switzerland (CH) and delivering plant in Spain (ES). The ship to party is located in Spain as well and my understanding for factors determining the MWST tax rates are Departure country (Plant) + Destination country (Ship to Party) + Tax classification from the customer master + Tax classification from the material master. If my understanding is correct, domestic tax rates should be applied as both the supplying plant and ship to party are located in Spain. However, the system takes the departure country from the company code and uses the export tax rates. Can someone please explain why would SAP use the company code country and how do we fix the issue? Thank you for your help.

Regards,

Pratheb

[Former Member · Accepted solution]

Hi All,

Found the answer. We had OSS note 10560 implemented and hence the deviation. I need to now understand why was this implemented. Thanks for all your time and help.

Regards,

Pratheb

[reazuddin_md]

Hi,

This is working as system design.  For travelling & visa purposes only Swiss is considered as part of EU countries.  Trading between other EU countries & Swiss is treated as "Export" sales ( not domestic sales).

You can even check in Table:T005, against CH - EU country field is not marked, but ES its marked.

Another test scenario, if you wish- you can test like create Order in comp code: Germany(DE) instead from CH, then its treated as "Domestic" sales.

Check the routine, you ll observe that system reads the country from comp code & compares from this table.

eg: Sales from Country :Cyprus to other EU countries.

Regards,

Reazuddin MD

[Former Member]

Hi,

   First explain me why your making dispatch from Spain plant and  ship to party is also belongs spain means why want use the company code of Switzerland instead of Spain company code

[Former Member]

Lakshmi/Srini,

The plant Z100 is flowing to the sales order and is assigned to country ES in OX10. To meet our customer requirements we have a distribution center in Spain and is used in the sales order as a plant. We do not have any financial/legal entity in Spain and hence the one in Switzerland is used for all FI purposes.

Regards,

Pratheb

[Lakshmipathi]

we have a distribution center in Spain and is used in the sales order as a plant.

Are you treating this distribution center as a plant and if so, as I already asked, which country is assigned to this ??

G. Lakshmipathi

[Former Member]

Hi,

    Check which business area you have assigned in the Tcode-OMJ7. Also have you done the assignment your Spain plant to your S.org.+D.ch in SPRO --> IMG --> Enterprise structure --> Assignment ---> Assign sales organization - distribution channel - plant

[Lakshmipathi]

First check in sale order what delivering plant is flowing.  Next ensure that the right country is assigned to that plant in OX10.

G. Lakshmipathi