SAP Knowledge Base Article - Public

1794122 - Tax Country Determination is not Correct for a 'Sale of Service' From One EU (European Union) Country to Another EU Country

Symptom

Tax country determination is not correct for a Sale of Service from one EU (European Union) country to another EU country.

Environment

SAP Business Bydesign

Reproducing the Issue

  1. Go to the Sales Orders work center.
  2. Go to the Sales Orders view.
  3. Create a New Sales Order XYZ (XYZ represents the ID of the sales order).
  4. Add the necessary details like Account, Sales Unit etc.
  5. Click the View All button and go to the Items tab.
  6. Add a service product ABC in the Items table (ABC represents the ID of the service product).
    • In this scenario the source or seller and ship-to countries DEF & GHI are member of the EU respectively (DEF represents the seller country & GHI represents the destination country).
  7. Go to the Taxes subtab.
  8. The tax country determined is for the source or seller country which is DEF.

However you expect the tax country determination to be based on the ship-to destination GHI.

Cause

Service taxability based on destination or at source is decided by using the master data of the service.
The service used in the sales order XYZ is not set up to be taxed at the destination and hence it is not taxable in the destination country GHI but at the source country DEF.

This logic is designed as per the legal laws for the service taxability in the EU countries.

Resolution

Follow the below steps to make the service taxable in the destination country GHI:

  1. Go to the Product and Service Portfolio work center.
  2. Go to the Services view.
  3. Show All Services and find ABC (ABC represents the ID of the service product).
  4. Edit the service product ABC.
  5. Click the View All button.
  6. Go to the Taxes tab.
  7. Click the Add Row button to add the country GHI (GHI represents the destination EU country).
  8. Save the changes.

Re-trigger the price calculation in the sales order and it will trigger tax re-calculation for the sales order:

  1. Go to the Sales Orders work center.
  2. Go to the Sales Orders view.
  3. Show All Orders and find XYZ (XYZ represents the ID of the sales order).
  4. Edit the sales order XYZ and click the View All button.
  5. Go to the Pricing tab.
  6. Under the table Total Pricing -> click the Update Pricing - Completely button.
  7. The prices and tax will be updated as per the changes done in the service master data for the destination country GHI.

Keywords

Tax; Determination; Sales; Service; imposition; pays; UE; taxe , KBA , csg_q , #### , ### , AP-SLO , Sales Order Processing , How To

Product

SAP Business ByDesign all versions

Attachments

ChineseTranslationOnly_1794122.pdf