XD03 liable for taxes

[Former Member]

hi,

in XD03, tab billing documents, there is a part on Taxes at the bottom.

in tax classification column, if i enter 1, how can i know where to see the effect that it is liable for taxes by country?

in the path "define and assign account keys", i can know which procedure with account key which is tax relevant like account key MWS.

also in vk11, also can define tax.

but i do not understand what is the implication of maintaining 1 (liable for taxes) at tax classification column in XD03.

need advice what is the implication of entering 1 at tax classification in XD03.

thanks

[jpfriends079 · Accepted solution]

Banniya Ban

Customer tax classification, or simply words customer tax status is one of the factor. Based on which tax rates or tax liability are determined.

This customer tax classification indicator, if maintain in customer master field gets updated in Header data of Sales Order (Billing Document Tab - Billing Section -Alt.tax classific Field) & Billing Doc (Header Tab - Taxes Section - TaxClass1-Cust.Field).

Now, look at following combination

Customer Tax Status	Material Tax Status	Liable to pay Tax
Liable for Taxes	Taxable	Tax to be paid
Liable for Taxes	No Tax	No Tax to be paid
Tax Exempt	Taxable	No Tax to be paid
Tax Exempt	No Tax	No Tax to be paid
Tax Concession	Taxable	Reduced Tax to be paid
Tax Concession	No Tax	No Tax to be paid

I hope that helps you. If you still have concerns, do revert back.

Regards, JP

[Former Member · Accepted solution]

Hi,

thanks for the advice.

Meaning in XD03 billing document tab,

if the tax classification column is 1 (liable for tax), that means sales to this country is liable for tax?

if tax classification column is 0, that means sales to this country is tax exempt?

If above 2 'if' are yes, then why need to determine tax in customer master? we can define in VK11 by country.

this is why i do not understand what is the implication of maintaining 1 (liable for taxes) at tax classification column in XD03.

need kind advice.

thanks

[jpfriends079 · Accepted solution]

See it's not like that. My intention was make you understand the concept behind tax classification.

Further, tax liability or determination takes place based on:

- Departure country as maintain in your delivering plant

- Destination country of Ship-to party

- Tax classification for customer

- Tax classification for material

Hope that helps.

Regards, JP

[Former Member · Accepted solution]

hi,

thanks.

ok, back to my original doubt.

in XD03,

if the tax classification column is 1 (liable for tax), that means sales to this country is liable for tax?

if tax classification column is 0, that means sales to this country is tax exempt?

thanks

[jpfriends079 · Accepted solution]

If you can specify for which plant's country your seeking this information that will help us in guiding you further.

As India, export are duty free. Further, there are different tax rates/rules for customer and material based on tax classification combination.

if the tax classification column is 1 (liable for tax), that means sales to this country is liable for tax?

No. This means tax status of customer in Deliverying Plant Country's is Liable for tax

if tax classification column is 0, that means sales to this country is tax exempt?

Similarly, tax status of customer in Deliverying Plant's Country is tax exempt.

I hope that helps. If you still have concerns, kindly elaborate your understanding/issue.

Regards, JP

Message was edited by: Jyoti Prakash - addition comments added marked in blue.

[Former Member · Accepted solution]

Hi,

the key driving factor is the "Tax rate" and "Tax Code" you maintain in VK11.

[Former Member · Accepted solution]

Hi Jyoti,

Meaning the tax classification in XD03 is referring to delivery plant? Now I confused.

In my system, there is a case where customer in singapore.

for this customer, there is a 1 at tax classification in XD03. So i do not think this is delivery plant.

any advice. i just need the general practice of this tax classification in xd03.

thanks

[jpfriends079 · Accepted solution]

Meaning the tax classification in XD03 is referring to delivery plant?

No. Delivery plant is maintain in sales order.

In XD03,

For further clarity/understanding/reference on tax determination in SAP, please refer following SAP Note 872449 - Tax determination in Sales and Distribution.

Thanks, JP

[phanikumar_v3]

Arey Dear,

As suggested By Mr Jyothi praksash--the classification you are maintaining at XD03 tells the system to calculate tax for this customer.(whether liable/Exempted)

Let me explain with example.

Suppose ZXXX is one tax condition type can be used all over India/State.(let us assumes that this condition type is a CST condition type)

So any customer whom so ever is doing sales will attract this condition type across states.

But there is a customer in Gujarat-near to the desert of Thar and the government has given some special approval for this customer to get exemption for CST.

This exemption will be understood by System--if you maintain for this customer 0-tax exemption.

Now you might got the thing required.

Mr Jyothi has elaborated this in length--say thanks to him.

Phanikumar

[Former Member]

This message was moderated.

[Former Member]

Dear Banniya,

Check out Performance Assistant (F1) for Tax Classification for Customer, also refer to the past thread. It's quiet useful. Rgds.

http://scn.sap.com/message/10205162

[bsivasankarreddy_reddy]

hi

customer master level you maintain the tax classification based on tax category

like MWST -  1

when you maintain the condition records for MWST at VK11 here one of the field is customer tax calcification ,

now you create the condition records  system check the records customer level customer calcification  calcification when its full fill then sale order level mwst value its come

main purpose is maintain the condition records level you can use this calcification is main important