Tax classification is not changing

[Former Member]

Dear All,

Please suggest .

When same customer is going to extend in different distribution channel, tax classification shows same.

It should be different because VAT are coming from the tax classification of the customer.

Regards,

DS

[VeselinaPeykova]

You extend a customer for a combination of sales organization, distribution channel and division, not just for a distribution channel.

The tax classification is used to determine the tax liability of a customer in a specific country.

Imagine I am a customer in London and I wish to buy a specific model of HDD from your Bristol subsidiary. No matter if I go and take it from one of your shops there or you deliver it to me from your Bristol warehouse as a part of a bulk sales order, I have to pay the same VAT %.

If I buy the same HDD from another country, then this is a different story.

You can have tax exemption or different % for certain customers or for certain materials or for combinations of both, or you can have taxes per state (like in USA or Switzerland), but if the starting and destination points for two purchases are the same and the product bought is the same, then the tax % should also be the same.

I am probably not very good at giving good examples for this topic, but if you go and speak to one of your colleagues from Accounting, they can explain how exactly taxation is done in your country.

[jpfriends079]

Hi Deepak,

When same customer is going to extend in different distribution channel, tax classification shows same.

This is standard SAP Feature. As Customer tax liability for a country remains same through out the country.

Please refer my response in the following discussion:

So, technically, as Customer Sales Area data relevant data is stored in Table KNVV and Customer Tax Indicator relevant data is stored in Table KNVI. And in Table KNVI is maintained based on country, not Sales Area.

It should be different because VAT are coming from the tax classification of the customer.

As tax determination happens based on Ship-to Party. And for VAT, region(State) of Ship-to party will play vital role. So, my advice would be to get this differentiated based on Ship-to party masters.

Thanks, JP

[Former Member]

Hi Jyoti,

Thanks for your reply.

As per your comments is not possible in the same sold to party code?

I cannot create ship to party code because user are not agree for this.

They want to be same customer code follow according to the distribution channel and tax respectively.

Regards,

DS

[jpfriends079]

Hi Deepak,

FYI, as per SAP best practices Tax is determine on the bases of

Determination factors	SAP Fields Name
- Departure Country of Delivering Plant	(ALAND)
- Destination Country of Ship-to Party	(LAND1)
- Tax Classification for Customer (from customer master)	(TAXK1...TAXK6)
- Tax Classification for material (from material master)	( TAXM1...TAXM6)

Tax determination will get determined on the based on Ship-to Party, not sold to party. Destination/shipping address of the customer is determined through Ship-to Party.

For further reference, you can refer SAP Consulting Note 872449 - Tax determination in Sales and Distribution.

Out of context would recommend you to refer the following discussion, b'coz as per India Tax context, Plant Region and Customer Region will a critical role in determining a relevant tax and tax rate in the sales doc:

- Tax calculation in Sales Order | SCN

I cannot create ship to party code because user are not agree for this.

See here your consulting and convincing skill will come into the use. Either you recommend your user to refer this post. Or you can do a POC for the customer. Provided you are convinced with this standard logic.

If you still have any concerns, please let us know.

Thanks, JP

[siva_vasireddy2]

Hi,

when the customer is refereed same gets copied which need to be changed as per the requirement.

This is the standard behavior.if the customers are refered one to one you can change manually

if it is mass upload you can obviously maintain in the reference document.

if it is still not changing go to OB20 check the settings both for create/change customer(sales)