2180644 - How to Split Input VAT Into Partially Deductible And Non-Deductible Input Tax

You need to set up a tax code referring to a tax event for which a part of the input tax, X% is deductible, whereas a second part, Y% is to be posted as non-deductible input tax to an expense account.

SAP Business ByDesign

According to the SAP ByDesign help document Configuration: Tax Codes you have created a partial deductibility code and a tax code using the newly created deductibility:

To create a partial deductibility:

1. In the Business Configuration work center navigate to either the Implementation Projects view, select your implementation project and open the Activity List.  
2. Go to the Fine-Tune- phase.
3. Select the Tax Settings for Purchasing activity (If your system is already live navigate to the Overview view and select this activity from there).
4. In the Available Deductibility Types table press Copy to add a new line.
5. Select the respective Country and Tax Type.
6. Enter a new Deductibility Code, e.g. DCX and an adequate description, e.g. Partially Deductible: X%.
7. In the table underneath specify the validity and the Deductibility Rate in %, e.g. X%.
8. Press Save and Close.

To assign the new deductibility to a tax code:

1. In the Business Configuration work center navigate to either the Implementation Projects view, select your implementation project and open the Activity List.  
2. Go to the Fine-Tune- phase.
3. Select the Tax on Good and Services activity (If your system is already live navigate to the Overview view and select this activity from there).
4. In the new window, under Tax Codes click on the Define Tax Codes link.
5. Under Available Tax Codes press Add.
6. Select the respective Country.
7. Enter a new Tax Code, e.g. DCX,and a Description, e.g. Domestic Acquisition, X% deductible.
8. Maintain a Valid From and Valid To Date.
9. In the Tax Event column select a tax event for incoming tax scenarios, e.g. Domestic Acquisition (ID 10).
10. Press Save and then Close.

You now need to define the G/L Account that shall be used for the non-deductible Input Tax:

1. In the Business Configuration work center navigate to either the Implementation Projects view, select your implementation project and open the Activity List.  
2. Go to the Fine-Tune- phase.
3. Select the Charts of Accounts, Financial Reporting Structures, Account Determination activity (If your system is already live navigate to the Overview view and select this activity from there).
4. Under Account Determination press on the Costs link.
5. Navigate to the General Expenses tab.
6. Here search for the Account Determination Group that is to be used for this scenario.
7. Enter an expense G/L account in to the Non-Deductible Input Tax column. 

You can now assign the tax code and cost account determination group to the respective item in your purchasing document:

1. Assign the newly created tax code, e.g. DCX.
2. In the Account Assignment tab (Cost Distribution tab for a Supplier Invoice item) select an account determination group for which you have defined a G/L account for non-deductible input tax.

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