1864731 - The Tax Calculated for a Service Product is Incorrect if the Ship-to Party is the Contact of Account (EU Tax Scenario)

The tax calculated is incorrect for a service product if the Ship-to party is the Contact of Account.

Note: This case document deals with the EU specific tax scenario.

SAP Business ByDesign

1. Go to the Sales Orders work center.
2. Select New Sales Order from Common Task.
3. Add the account ABC in the sales order (ABC represents the ID of the account).
4. Add ship-to party XYZ (XYZ is the contact maintained under account ABC).
5. Go to the Items tab of the sales order and add a service DEF (DEF represents the ID of the service).
6. Select the Taxes subtab.
7. The tax calculated is for the Ship-to country.
8. If you change the ship-to party from the contact XYZ to account ABC then the tax determined for the ship-to country.

However, since both contact and account belong to same country, you expect same tax determination while keeping any of them as ship-to.

The tax determination logic in the system differs if a ship-to party is not a company:

1. If you select contact XYZ as ship-to, then the condition Is Service Recipient is company? becomes False -> hence the tax is determined as Domestic Supply.
2. If you select account ABC as ship-to, then the condition Is Service Recipient is company? becomes True -> hence the tax is determined as EU sale of services, reverse charge which determines ship-to country as tax country.

This is the expected behavior of SAP Business ByDesign.

Tax Code; Service Recipient; Ship-To; Person; Company; Employee; 504; 540; EU Sale of Services; RevCharge; Domestic Sale of Services; VAT Exempt Art 7 , KBA , service , tax code , ship-to , person , company , tax code in intercompany sales order , AP-SLO-SO , Sales Order , SRD-CRM-ORD , Orders & Contracts , How To