Why do we maintain A0 & V0 Tax Code in OBCL ?

[Former Member]

Hello All Experts,

Why do we maintain the A0 & V0 in OBCL ( Maintain Tax Code for Non-Taxable Transactions ).

Why do we need Tax Codes to be enter or maintained if it is clearly saying Non-Taxable transaction ?

Can anybody explain this... I have gone through many more threads I didn't find any explanative thread regarding the same.

I request the forum experts to guide on this.

Regards,

Sharu.....

[Former Member · Accepted solution]

Assign Input Tax Indicator for Non-Taxable Acquisitions

In this step, you specify an input tax indicator per company code. The system then uses this indicator when you post acquisitions that are not subject to tax, but which are posted to accounts that are tax-relevant.

Example

An acquisition of this type is an acquisition from in-house production. In the Asset Accounting posting transaction for this acquisition, the input tax indicator is not ready for input.

that means, when you are posting to tax relevant GL account, but tax is not applicable/exempted, this setting is required.

[Former Member · Accepted solution]

Hi Experts,

( This is just a F1 Help which I have already gone through.... )

Any more clues ?

Regards,

Sharu....

[former_member221582 · Accepted solution]

Hi - Let me explain it with a example. Say that you have a revenue account which is relevant to tax. In the GL master of the revenue account you would have maintained a Tax category. In this case any line item you post to this account should have tax code associated with it.

Now you have two customer one is a private party and another is a government agency (or any tax exempt customer). You will be posting the revenue of both the customers to the same account. In this case to successfully post the line item for the tax exempt customer you need to have these tax codes setup.

Moreover you have a jurisdiction code too in OBCL. This is required for if your tax procedure is jurisdiction  based.

Hope this helps!

[Former Member · Accepted solution]

Hi Sharu,

Let me try putting some color to Venkat (F1) explanation to see whether it might make it clear for you.  First of all the proper title for OBCL if you go through SPRO is " Assign Input Tax Indicator for Non-Taxable Acquisitions" Secondly, you will notice that the tax rates for V0 and A0 are zero.

Now let's delve into an example.

G/L Account 140000 is defined as tax relevant.  In other words, posting without tax is not allowed.  Suppose you post an asset acquisition transaction to this account ( 140000) which was generated from internal production and therefore requires no tax posting but because the account is tax relevant, the system reject the posting. 

How would you go about it if you are not allowed to change the account setup to "Posting without tax allowed"?  Do you now understand why you need to assign either V0 or A0?

Regards,

Elias

[Former Member · Accepted solution]

Dear Elias,

I understand the concept now on high level... But I didn't understood the example

where Suppose you post an asset acquisition transaction to this account ( 140000) which was generated from internal production and therefore requires no tax posting but because the account is tax relevant, the system reject the posting. 

What does this mean " Generated from internal production ?

Can you please explain ?

Regards,

Sharu...

[Former Member · Accepted solution]

Internal Production:  I am just basically referring to something originating from your manufacturing plant.

Consider Vignesh explanation with examples as well.

Regards,

Elias

[Marssel700]

F1 is good enough to reveal this mystery.