About Tax Determination - US

[former_member218287]

Dear Gurus,

I have a question regarding the TAX determination for US.

As we know we have UTXJ (having condition records) / JR1,JR2,JR3,JR4 (have no condition records and picks %ages from FTXP).

We have to deal with situation where we need to give discounts to certain customers to certain products.

So the orders from these specific customers / materials must not have usual taxes but reduced taxed.

Question1) I look for some suggestion to deal with this scenario.

Question2) I see the purpose of condition type UTXJ is only to determine Tax code, so system picks up values for JR1/2/3/4.
Can we try to maintain condition records against UTXJ since this has access sequences which has factors like tax classification of material and customer and main this special discounted tax so system determine this special tax, but then what will happen to the FTXP tax percentages?

One option we tries to manually change the Taxes in Order, but the billing will re-determine the taxes which is not a good option as well.

Do we have anything which deals with situation of special customers buying special products and then they discounts in taxes?

Thank you in advance.

KK

[Lakshmipathi · Accepted solution]

Insert one discount condition type between your net value and tax condition type in pricing procedure.  Set Access Sequence 307 to this discount condition type and maintain condition record only for those customers you want the system to calculate tax at reduced rate.  Now create a sale order and test the outcome.

G. Lakshmipathi

[former_member218287 · Accepted solution]

Hi Lakshmipathi Sir,

Thank you for replying.

Its a good opinion but also the value for JR1/2/3/4 will play a role?? So discount condition type + JR..'s will make tax wrongly calculated again?

I was looking for some answers below:

1) Why do we have tax conditions calculated from both UTXJ (some 12% e.g.) + JR1/2/3/4 (maybe 10%), now I see our client always maintains (Zero% tax) condition records and actual tax comes from JR1/2/3/4. Now if I have tax maintained in UTXJ as a condition records which we can assign as customer and material based on tax classifications, system will also calculate JR1.2.3.4 since we have condition records for that also in FI.

Can we think something like only UTXJ gets calculated for our customer/material but then JR1/2/3/4 do not pitch in at all? Will it be a best practice though?

Thanks

Kaushik

[Former Member]

Hi Kaushik,

UTXJ is usually a statistical condition type and only taxes calculated by the condition types JR1,JR2,JR3 and JR4 are posted to FI.

So if I have understood the requirement correctly, you will need to configure a new tax code which will be determined by UTXJ based on the customer/material tax classifications and the rates will have to be defined accordingly in FTXP for the new tax code.

Thanks,

Amith

[former_member218287]

Hi Rakesh,

Thank you for replying.

If we have it written in the logic of 902 how will we change it next time for another customer?

I think every time we cannot go for changing logic

We must think of maintaining something more dynamic.

Thanks

KK

[former_member200650]

I'm not sure about the exact requirement and what the issue you are facing currently and your expected results by system.

Normally SAP suggest to go for external tax calculation( e.g. VERTEX,TAXWARE,SABRIX etc) for US mainly. the reason could be too many tax jurisdictions or could be scenarios like you).

Based on your current procedure looks like you are calculating the tax internally with in ECC( in FTXP) and in OBBG it is assigned TAXUSJ.

I can't comment on go far external tax calculation system at this movement( if already internal tax calculation being used since long). May be you need to adjust the logic as per your requirement in the current routine 902.

Thanks!

[former_member218287]

Here is the Pricing procedure screen shot:

Its normal like the standard one.

Issue is like we need to give a tax discount to the customer, we do not want to maintain it manually.

Since tax is always re-determined while creating a billing document so the manual entries will be gone and reset with the original values.

So we are looking at the options to have some solution.

Thanks

KK

[former_member200650]

You need to check the calculation routine( 902 )logic what it is written. As per your latest requirement you can add the logic into your existing calculation routine.

[former_member200650]

Can we try to maintain condition records against UTXJ since this has access sequences which has factors like tax classification of material and customer and main this special discounted tax so system determine this special tax, but then what will happen to the FTXP tax percentages?

We usually maintain condition records for UTXJ only along with tax code. Once the condition records are found, system checks what is the % maintained for that particular tax code and determine the % into sales document.

Tax is calculated on net (which could be sales price or if any discounts then Price-Disc) when the price of the material is less then proportionately the tax value also will be reduced. I don’t see any issue here.

Please let me know if you have any issues.

Thanks!

[former_member218287]

Hi Rakesh,

Thank you for replying.

You told we maintain tax %age against the tax codes (means FTXP) but my issue is partial tax not full tax. I mean in this case, we have a scenario where if I maintain a tax % age in UTXJ (and say it as discounted tax) and also if system picks up JR1/Jr2 %ages also.

Then whole calculations goes wrong again?

Thanks

KK

[former_member200650]

Hi KK,

Can you please paste the sales pricing procedure if possible? ( e.g. JR1..JR4 & on what value it is calculated).

Please also help to show me one example in the sale document what exactly you are facing the calculation issue.

Thanks!