2713937 - Italy: VAT Input Tax and Withholding Tax Posting at Time of Supplier Down Payment

Please note: This KBA is relevant for Localization Italy.

• You clear a Down Payment Request with a payment generating a Down Payment for your supplier.
• In the posting you notice that postings have been made to the Withholding tax account as well as the account set up for input VAT.
• In the posting you notice a Withholding Tax credit posting as expected.
• You also notice a Input VAT debit entry.
• However, according to Italian legal requirements, you expect the input VAT not be posted at the time of the Down Payment but only at time of the Supplier Invoice.

SAP Business ByDesign

1. In the Payables work center go to the Suppliers- Supplier Accounts.
2. Select and view Account ABC (ABC represents the ID of the supplier in question.
3. In the Trade Payables tab find a document of type Down Payment.
4. Click on the Journal Entry ID in the Journal Entry ID field.
5. You notice a credit posting of the Withholding tax.
6. You also notice a debit posting of the VAT input tax.

You expect the Input VAT only to become relevant with the Supplier invoice posting, but not in the Down Payment posting.

Currently, and in all Country versions of SAP Business ByDesign, the Input VAT is debited on the tax account at time of the Down Payment posting.

Once the Down Payment gets cleared with the Supplier Invoice this input VAT entry is credited again, as the actual input VAT is being debited with the Supplier Invoice posting.

The postings in regards to Input VAT in a Down Payment - Supplier Invoice clearing scenario are as follows:

• Down Payment: Input Tax Account: Debit VAT
• Supplier Invoice: Input Tax Account: Debit VAT
• Clearing of Down Payment with Supplier Invoice:Credit VAT

The described handling of Input VAT in a down payment has been classified as limitation. It is planned to review and address the current posting logic in future releases of SAP Business ByDesign.

For now, and until further notice it is advised to handle Down Payment Request and Down Payment for Italy in regards to Input VAT processing outside SAP Business ByDesign.

Down payment Input VAT, Input VAT posting Supplier Invoice Italy , KBA , AP-TTE-GLO , Cross-Country Extensions , Problem