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SAP Knowledge Base Article - PublicSymptom
In a sales order the product tax classification on the item line is determined by using the country of the shipping plant. The determined product tax classification can be seen on the item line, it’s also possible to manually set a different one of item level.
The country of the shipping plant also determines the tax reporting country. However, it is possible to overwrite the tax reporting in the sales order header (Sales Order Header -> Billing Documents -> ‘Tax Departure C/R’) to account for different taxation variations, where the shipping plant is not the actual country where tax should be reported to. Usually the fields in the header stay empty. In SAP S/4HANA Cloud Edition you need to activate RITA (Registration for indirect taxation abroad) if you want to use another country than the company code country to report taxes to. Please check the RITA restriction note 2907372.
With SAP S/4HANA Cloud Edition 2111, if a manual set country is present in ‘Tax Departure C/R’, then this country will be taken to determine the product tax classification for all items instead of the country of the shipping plant, independent if you are using RITA or not. Up to now it was always the country of the shipping plant that has been used to determine the product tax classification, even if another country has manually been set on the sales order header. A change in the ‘Tax Departure C/R’ will trigger a redetermination of the corresponding product tax classification on all item lines. If the ‘Tax Departure C/R’ gets cleared again, then the country of the shipping plant will again be taken to determine the corresponding product tax classification. This explained behavior is only valid for SAP S/4HANA Cloud as of 2111 CE.
Image: 'Tax departure C/R' field in the sales order header:
Image: 'Product Tax Classification' on the item line:
Environment
SAP S/4HANA Cloud 2111 Version
Resolution
For all countries that you are using as a ‘Tax Departure C/R’ you need to ensure that the corresponding product tax classification exists and is maintained properly in the product master for that country. Otherwise, the system won’t be able to determine a product tax classification for the country. You would still be able to set it manually in the sales order item line but that is not the preferred option. Please note that you can only maintain product tax classification for countries where you have a plant.
If you wish to mass update the product tax classification for multiple materials, use the role ‘PRODMASTER_SPECIALIST’ and open the app ‘Mass Maintenance Materials’.
1. Use the tab ‘Fields’ and mark the relevant product tax classification you would like to update (e.g. MLAN-TAXM1). Click on execute.
2. Select/Filter the materials and country in scope. Click execute.
3. The next screen will provide you with the selected materials, country and display the current product tax classification.
4. On the top you can enter a new product tax classification value which should be applicable for the selected materials / country. You can specify a new value here, e.g. ‘1’. Click in the ‘Perform Mass Change’ button to copy down the value the selected material.
5. Click ‘Save’ in order perform save the updated product tax classification.
Keywords
Tax Departure Country, Material tax classification, LANDTX, MLAN, RITA , KBA , SD-BF-TX , Taxes , SD-BF-TX-2CL , Taxes (Public Cloud) , Product Enhancement
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