Non-Deductible Tax in Procurement

[jimmy_zhang1]

The detailed explanations regarding Taxes in purchasing are recorded in below SAP notes:

501054     FAQ: Taxes in purchasing
214151     Tax processing in purchasing

Let us review the customizings and have an example of non-deductible tax in procurement process. The simple example is procurement of non-stock material.

1. The setting of tax record which is assigned to a tax code in purchasing in FI Customizing (transaction FTXP).

2. For the determination of the tax code via the condition technique, condition type NAVS with assigned access sequence 003 is available in the standard system. Let us check the condition type in MM-PUR customizing (transaction M/06):

• In principle, you can assign this access sequence also to other condition types. The tax code is only transferred to the purchase order if class 'D' (taxes) is the condition type. If there are several condition types of this class in the condition schema, then the first condition schema which contains a tax code has priority.
• Non-deductible part of the tax should be regarded as an additional cost item of the procurement because the tax authorities do not refund this amount unlike the deductible part of the tax. Therefore, the non-deductible part of the tax is added to the stock value during the inventory posting. In the purchase order
  item, the non-deductible tax amount is saved in field EKPO-NAVNW and, if existing, it is saved in the first condition type of category 'N' (non-deductible tax). For this reason, calculation rule 'B' (fixed amount) must be set for the condition type (also refer to Note 138434).

3. Now the condition record needs to be maintained for the condition type NAVS in transaction MEK1:

Please note since we will create a PO for non-stock material, the key combination should be "Taxes: Plant, Account Assignment Origin and Region". Then the tax code is assigned to the condition record.

4. Let us now create a PO with Non-deductible part of the tax:

In the condition tab, we could see the calculated Non-Deductible Tax:

5. After the GR of the PO, from the accounting document we could see the the non-deductible part of the tax is added to the stock value during the inventory posting:

6. The next step is to create the invoice receipt for the PO:

From the accounting document of above IR, we could see the GR/IR clearing between GR and IR:

Now we have had a simple example to overview the use of Non-Deductible Tax. Let us change the customizing to further understand the configuration of Non-Deductible Tax condition type NAVS.

If we change the calculation type from B (Fixed amount) to A (Percentage), then what will happen?

Now let us create a new PO with condition type NAVS:

At the moment in table EKPO, EKPO-NAVNW=15 which is still the fix amount instead of the calculated one based on the percentage. In the next step GR we could see the result of the Non-deductible tax more clearly.

As note 501054 stated:

Calculation rule 'B' (fixed amount) must be set for the condition type (also refer to Note 138434). Moreover, you have to take into account that the non-deductible tax amount is calculated with function module 'CALCULATE_TAX_ITEM' program-internally. The calculation does not occur within the price determination. As a result of this, the tax amount is only calculated after you have returned from the condition screen and is not calculated on the condition screen when you change the price.