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SAP Transportation Management for T&L for SAP S/4HANA: Tax Determination for Individual Services Purchased-Part 2

This blog post is the continuation (Part 2) of my previous blog post “SAP Transportation Management for T&L for SAP S/4HANA: Tax Determination for Individual Services Purchased-Part 1”, the link for the same is mentioned below:

https://blogs.sap.com/2020/03/13/sap-transportation-management-for-tl-for-sap-s-4hana-tax-determination-for-individual-services-purchased-part-1/

To get a complete overview of the topic kindly read the two blogs as per sequence.

In this blog post we cover the below remaining points

  • Set-up
    1. Enabling Tax determination for Services
    2. Tax condition table and related setup
    3. Available BADIs

Note:  I have demonstrated the functionality in this blog post using system screen images with relevant data for ease of understanding for the readers. It should be noted that these screens and the data is from SAP’s internal test systems and has no relation to any external source

Also it is important to remember that the scenario we are discussing is from the service receiver’s perspective to have control over the Supplier’s Invoice.

Before we jump into the details lets summarise the important parameters which affect the Tax Code derivation.

Country Of the Company Code of the Purchase Order: Decides to whom the Transporter supplied the service (Not the physical location)

Country of the Source Location of the Freight Order: Used to identify if the transport is within or outside customs union.

Country of the Destination Location of the Freight Order: Used to identify if the transport is within or outside customs union. Example: Very common in European Union.

Country of the Supplier/Vendor: Where is the Supplier/Vendor established. Example: Very common in European Union.

Tax Treatment of the Service (or Price element or Charge): Services can have different Tax treatment  by the country where the the service are supplied. Example all the Services which are directly related to Transport (Cargo) can have a different Tax treatment to those services which are not directly linked to the Transport. Example Inland Haulage Vs. Cancellation Fees.

In addition to above, depending on the business there could few more parameters involved.

For example, in case of Export scenario if the cargo is Exported then the inland transport preceding the export leg could be exempted. In such cases it is also necessary to identify few other parameters like Port of Loading and Port of Discharge.

Set-up

  • Enabling Tax determination for Services: In SAP Transportation Management for T&L for SAP S/4HANA services purchased/sold are refereed to Charge Types from a financial perspective. Below settings need to be done in SPRO > Transportation Management > Settlement > Freight Settlement > Integration for Settlement Posting > Tax

As explained in the blog post part 1, with the Freight Settlement posting we generate a technical Purchase Order and Service Entry Sheet. In the Service Entry Sheet, service masters are used instead of the Charge Types (via mapping table).

The Tax determination now takes place using MM-SRV process. It is required that Tax calculation is enabled for Services in MM-SRV

Below settings needs to be done in SPRO > Materials Management > External Services Management > Taxes at Individual Service Level

  • Tax condition table and related setup: It is presumed that audience in general know how the Freight Settlement Integration works. You can read in the below help documentation

https://help.sap.com/viewer/e3dc5400c1cc41d1bc0ae0e7fd9aa5a2/1909.001/en-US/26172354a89c024be10000000a44176d.html

It is also presumed that configurator has basic understanding of Materials Management Pricing functionality.

The pricing procedure used in the Service Entry Sheet needs to have the Tax Condition Type. The Tax condition Type must have a Access Sequence which has a Condition Table with below fields from KOMK and KOMP pricing communication structure. All of this is defined in SPRO > Materials Management > External Services Management > Maintain Conditions for Services

Example of a Condition Table could be as one shown below

Tax Condition records are maintained using transaction ML51. Example of condition records are shown below.

 

  • Available BADIs: SAP Transportation Management in SAP S/4HANA uses below internal BADI to pass the KOMK/KOMP pricing communication structure fields during the Creation of Purchase Order & Service Entry Sheet. This BADI cannot be used by Customers.

It is important to note that when a user checks an existing service entry sheet pricing analysis the KOMK/KOMP fields will not hold the data at that point in time and below could be the result. This could be a bit confusing for the customers but this is as per the design.

If customer implementations need additional data from SAP Transportation Management into the KOMK/KOMP pricing communication structure, then below BADI can be used.

I hope blog post 1 & 2 together provides a complete overview of the flexibility offered by SAP Transportation Management for T&L for SAP S/4HANA in the area of Freight Settlement Tax determination.

Happy Reading !!!

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