3047994 - BREXIT Tax Code and Tax Country Determination Northern Ireland

If you have customer and suppliers in GB and in particular Northern Ireland regions you will have to check and maintain correct postal codes. The system will be using postal codes to determine if good shipment is happening to Northern Island Regions for Tax determinations.

For this the System has a new Tax Number Type Northern Ireland Protocol: VAT Reg. No which you as a customer will have to maintain in case you have business transactions in Northern Ireland regions. It will same similar validations as GB VAT Tax Number.

If an order/invoice/transaction is from or to a customer/supplier who has an address with country GB, system will further check postal codes to determine if it should be treated as EU or Export/Import Transaction.

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Please find below 4 examples on how the Tax Code and Tax Country is determined if the Ship-From Party is located in a Country within the EU and the Ship-To Party is located in either Northern Ireland or in the United Kingdom but not Northern Ireland.

We will use the Ship-From location as Germany, a Material and the Sales Document Sales Order in this example.

Example 1:

For an Account which has a postal code in Northern Ireland the system but has not maintained a VAT Registration Number and not a Northern Ireland Protocol: VAT Reg. No. and the Ship-From is e.g. Germany and the Seller is registered in the UK.

 

The Tax Decision tree is then as follows:

Decision Tree: AP_PT_DE7 TXDT 000000000003

Test: Is it a sale? -> true

Test: Is it a sale of goods? -> true

Test: Is ship-from in DE? -> true

Test: Is ship-to in DE? -> false

Northern Ireland continues to be a part of EU for goods transactions

Test: Is ship-to in other EU member state? -> true

Test: Is ship-to an extra-community territory? -> false

Test: Is customer VAT registered in ship-to country? -> false

Test: Is seller VAT registered in ship-to country? -> true

Result: not taxable in DE

Configuration result: No result obtained for bus. partner country GB.

Decision Tree: AP_PT_GB4 TXDT 000000000004

Test: Is it a sale? -> true

Test: Is it a good? -> true

Test: Is ship-from in GB? -> false

Test: Is ship-to in GB? -> true

Test: Is Ship-To in XI ? -> true

Test: Is ship-from in another EU member state? -> true

Test: Is customer VAT registered in the ship-to country? -> false

Test: Is supplier registered in the ship-to country? -> true

Test: Is good subject to reverse charge? -> false

Result: Distance selling (Taxable in GB)

 

In this case the System will determine Tax Country GB - United Kingdom and Tax Code 511 - EU Distance Sale of Goods, Standard Rate.

Example 2:

For an Account which has a postal code in Northern Ireland the system but has not maintained a VAT Registration Number and not a Northern Ireland Protocol: VAT Reg. No. and the Ship-From is e.g. Germany and the Seller is not registered in the UK.

 

The Tax Decision tree is then as follows:

Decision Tree: AP_PT_DE7 TXDT 000000000003

Test: Is it a sale? -> true

Test: Is it a sale of goods? -> true

Test: Is ship-from in DE? -> true

Test: Is ship-to in DE? -> false

Test: Is ship-to in DE? -> false

Northern Ireland continues to be a part of EU for goods transactions

Test: Is ship-to in other EU member state? -> true

Test: Is ship-to an extra-community territory? -> false

Test: Is customer VAT registered in ship-to country? -> false

Test: Is seller VAT registered in ship-to country? -> false

Result: Domestic sale

Configuration result: No result obtained for bus. partner country GB.

Decision Tree: AP_PT_GB4 TXDT 000000000004

Test: Is it a sale? -> true

Test: Is it a good? -> true

Test: Is ship-from in GB? -> false

Test: Is ship-to in GB? -> true

Test: Is Ship-To in XI ? -> true

Test: Is buyer a company ? -> true

Result: Distance selling (Taxable in GB)

Result: Not taxable in GB

In this case the System will determine Tax Country DE - Germany and Tax Code 501 - Domestic Supply (Standard Rate).

 

Example 3:

For an Account which has a postal code in Northern Ireland the system, a VAT Registration Number and a Northern Ireland Protocol: VAT Reg. No. was maintained and the Ship-From is e.g. Germany.

 

The Tax Decision tree is then as follows:

Decision Tree: AP_PT_DE7 TXDT 000000000003

Test: Is it a sale? -> true

Test: Is it a sale of goods? -> true

Test: Is ship-from in DE? -> true

Test: Is ship-to in DE? -> false

Northern Ireland continues to be a part of EU for goods transactions

Test: Is ship-to in other EU member state? -> true

Test: Is ship-to an extra-community territory? -> false

Test: Is customer VAT registered in ship-to country? -> true

Test: Is customer VAT registered in ship-from country? -> false

Result: Intra-community supply

Configuration result: No result obtained for bus. partner country GB.

Decision Tree: AP_PT_GB4 TXDT 000000000004

Test: Is it a sale? -> true

Test: Is it a good? -> true

Test: Is ship-from in GB? -> false

Test: Is ship-to in GB? -> true

Test: Is Ship-To in XI ? -> true

Test: Is ship-from in another EU member state? -> true

Test: Is customer VAT registered in the ship-to country? -> true

Result: Not taxable in GB

 

In this case the System will determine Tax Country DE - Germany and Tax Code 507 - Intra-Community Supply.

 

Example 4:

For an Account which has a postal code in Great Britain the system, a VAT Registration Number was not maintained and the Ship-From is e.g. Germany and the Seller is registered in the UK.

 

The Tax Decision tree is then as follows:

Decision Tree: AP_PT_DE7 TXDT 000000000003

Test: Is it a sale? -> true

Test: Is it a sale of goods? -> true

Test: Is ship-from in DE? -> true

Test: Is ship-to in DE? -> false

Test: Is ship-to in other EU member state? -> false

Test: Is this an over the counter sale? -> false

Result: Export to third country

Configuration result: No result obtained for bus. partner country GB.

Decision Tree: AP_PT_GB4 TXDT 000000000004

Test: Is it a sale? -> true

Test: Is it a good? -> true

Test: Is ship-from in GB? -> false

Test: Is ship-to in GB? -> true

Test: Is Ship-To in XI ? -> false

Test: Is ship-from in Isle of Man (IM)? -> false

Test: Is customer VAT registered in the ship-to country? -> false

Test: Is supplier registered in the ship-to country? -> true

Amount  used for threshold comparison

Test: Is net amount below 135 GBP ? -> true

Result: Domestic sale of goods

 

In this case the System will determine Tax Country GB - United Kingdom and Tax Code 501 - Domestic Sale of Goods, Standard Rate.

Example 5:

For an Account which has a postal code in Great Britain the system, a VAT Registration Number was not maintained and the Ship-From is e.g. Germany and the Seller is not registered in the UK.

 

The Tax Decision tree is then as follows:

Decision Tree: AP_PT_DE7 TXDT 000000000003

Test: Is it a sale? -> true

Test: Is it a sale of goods? -> true

Test: Is ship-from in DE? -> true

Test: Is ship-to in DE? -> false

Test: Is ship-to in other EU member state? -> false

Test: Is this an over the counter sale? -> false

Result: Export to third country

Configuration result: No result obtained for bus. partner country GB.

Decision Tree: AP_PT_GB4 TXDT 000000000004

Test: Is it a sale? -> true

Test: Is it a good? -> true

Test: Is ship-from in GB? -> false

Test: Is ship-to in GB? -> true

Test: Is Ship-To in XI ? -> false

Test: Is ship-from in Isle of Man (IM)? -> false

Test: Is customer VAT registered in the ship-to country? -> false

Test: Is supplier registered in the ship-to country? -> true

Amount  used for threshold comparison

Test: Is net amount below 135 GBP ? -> true

Result: Domestic sale of goods

 

In this case the System will determine Tax Country GB - United Kingdom and Tax Code 501 - Domestic Sale of Goods, Standard Rate.

 

Example 6:

For an Account which has a postal code in Great Britain the system, a VAT Registration Number was maintained and the Ship-From is e.g. Germany.

 

Decision Tree: AP_PT_DE7 TXDT 000000000003

Test: Is it a sale? -> true

Test: Is it a sale of goods? -> true

Test: Is ship-from in DE? -> true

Test: Is ship-to in DE? -> false

Test: Is ship-to in other EU member state? -> false

Test: Is this an over the counter sale? -> false

Result: Export to third country

Configuration result: No result obtained for bus. partner country GB.

Decision Tree: AP_PT_GB4 TXDT 000000000004

Test: Is it a sale? -> true

Test: Is it a good? -> true

Test: Is ship-from in GB? -> false

Test: Is ship-to in GB? -> true

Test: Is Ship-To in XI ? -> false

Test: Is ship-from in Isle of Man (IM)? -> false

Test: Is customer VAT registered in the ship-to country? -> true

Result: Not taxable in GB

 

In this case the System will determine Tax Country DE - Germany and Tax Code 508 - Export To Third Country.

 

Blog: SAP Business ByDesign – Impact due to Brexit updated 8th January 2021

Brexit; Tax Code; 507; EU; Northern Ireland Protocol , KBA , AP-TTE-TC , Tax Calculation , AP-TTE-GLO , Cross-Country Extensions , SRD-CRM-ORD , Orders & Contracts , Problem

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