While creating billing documents or sales order SAP needs to calculate tax values for the items that needs to be invoiced. The following will explain how the basic process works.
Taxes will be determined during pricing of a billing document with condition technique.
Departure country, destination country, tax classification of customer and material are relevant attributes during tax calculation.
When creating a billing document or sales order the pricing procedure will be determined dependent on the used billing or sales order type.
A pricing procedure consists of several condition types. One of these types will calculate the taxes.
Whether it is an export or domestic business will be checked with requirements 7 and 8 assigned to the accesses in the access sequence.
Requirement 7 will check whether destination country equals departure country. If that is not fulfilled it is a domestic business.
A business transaction within the EU is also considered to be a domestic process if the partner has no VAT registration number (and both are EU countries).
Requirement 8 executes the same checks but with inverted conditions.
With that information whether it is a domestic or export business, tax amount will be determined dependent on the
· tax classification of the customer
· tax classification of the material
· departure country
· destination country
Additionally, the tax code will be determined and assigned to non-tax conditions when the billing document is released to accounting based on the settings of the pricing procedure present in the invoice.
Tax codes are used to:
· Check the tax on sales/purchases amount in the document
· Calculate the amount of tax on sales/purchases automatically on request
· Calculate the non-deductible input tax portion
· Check if a tax account with tax type (input or output tax) can be posted to
· Determine the tax account
· The tax classification of a material and customer can be maintained within the material or customer master in the corresponding app.
· Within the configuration items for “Sales: Price Management” (Configuration step ID: 500110) you can influence different aspects of pricing.
· Within the configuration items for “Sales: Basic Functions, Taxes” (Configuration step ID: 500287) you can influence how taxes are calculated in sales documents and billing documents.
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Let’s assume the followings:
Partner A delivers product P to partner B.
Partner A is located in France and partner B is located in Germany.
Both have the tax classification 1.
The material P has the tax classification 0.
We create a Sell-From-Stock scenario (Scope item BD9).
That means that we first create a sales order. Afterwards we will create a delivery and a billing document with type F2.
For F2 the system will determine the pricing procedure A10021 that contains the tax condition type TTX1.
Access sequence TTX1 is assigned to the condition type TTX1.
This access sequence will check first the requirement 7 and identifies that this isn’t a domestic process.
The next access will execute requirement 8 and identifies that this is an export business.
Afterwards the condition record for country FR, destination country DE, tax classification of the customer 1 and tax classification of the material 0 will return 18%, valid on the service rendered date.