Tax calculation.

[Former Member]

06.08.2008

Hi friends,

I have some doubts about the configuration for tax calculation. SDN search has given me some ideas but my setting is not going the way its explained. Please advise where i am going wrong.

Under IMG>SD>Basic Functions>Taxes>Maintain Sales Tax Ident.Num. Classification. I have maintained blank against the Sales Organization. (i.e priority rule).

My Sold to Party has no VAT reg. no, tax classification is 0 (Tax exempt).

Ship to Party too has no VAT reg.no, tax classification is 1 (Liable for tax).

When i create a Sales Order with the above SP and SH how and why is the tax calculation done on SH. My Payer is same as Sold to Party.

As per explanation in SDN if its blank against Sales Org in the config and there is no VAT reg no against SP or SH how is the tax classification based on my SH.

Regards,

Uday

[Former Member · Accepted solution]

Sold-to-Party is the ordering party. Ship-to-party is the receiver of goods. Hence, Tax is calculated on Ship to Party.

It is recommended to make Tax classification for Ship to Party as '0', so that objective is achieved.

Regards,

Rajesh Banka

[Lakshmipathi]

Dear Uday

What you experienced is correct. In the IMG path indicated by you, if blank field is maintained for sales organization, then tax will be determined based on ship to party region by default. Also you have maintained the tax classification as 1 for your ship to party and that is why, tax is flowing in your case.

If you dont want tax to flow for the said ship to party, maintain zero for this customer.

thanks

G. Lakshmipathi

[Former Member]

Dear Lakshmipati,

Thanks for your reply. My actual requirement was Sales Tax calculation to be based on the tax classification code of SP and I had got an answer through an earlier query wherein u had advised me to use 1 (Based on SP) against my Sales Organization in the configuration.

Still wanted to clear some doubts on the following statements in SDN search.

"If you leave the field blank, the standard priority rule works as follows:

1. If the payer has a VAT ID number and RG <> AG, then the tax number and tax classification are copied from the payer (in this case, the ship-to party is not relevant.) The tax number is taken according to the 'tax country of destination.

2. If 1. does not apply: If the ship-to party has a VAT registration number and the sold-to-party does not, tax number and tax classification are copied from the ship-to party.

3. If 2. does not apply: Tax number and tax classification are copied from the sold-to party."

So is it that if VAT Reg no. is not available in SH,SP or PY the default (SH) is taken into consideration?

Regards,

Udaynath.

[Former Member]

Hi

Uday

Tax code is maintain against the tax clasification of SH and not SP. As u said yr SH taxk is 1.

If u don't want to calculate tax then maintain SH taxk as '0'.

Thx.