3767100 - Incorrect Tax Code 501 Determined Instead of Tax Code 580 Due to Expired OSS Tax Return Validity

Symptom

In Customer Invoice the system determines Tax Code 501 - Domestic Supply (Standard Rate) instead of the expected Tax Code 580 - EU Sale of Goods to private persons (OSS Standard Rate).

Environment

SAP Business ByDesign

Reproducing the Issue

Go to the Customer Invoicing work center.
Go to the Invoice Documents view.
Search for the Customer Invoice ABC (ABC represents the Customer Invoice ID).
Click on Edit and select View All.
Navigate to the Taxes sub tab.
Observe that the Tax Code is displayed as 501 - Domestic Supply (Standard Rate).

The expected Tax Code is 580 - EU Sale of Goods to private persons (OSS Standard Rate).

Cause

Scenario 1: OSS Tax Return Arrangement of the Seller Company Has Expired

The validity period of the Company Tax Arrangement for Tax Return Type: 6 - OSS Tax Return has expired for the corresponding seller company.

Due to the expired validity, the system is unable to determine the OSS tax correctly and therefore derives Tax Code 501 - Domestic Supply (Standard Rate) instead of Tax Code 580 - EU Sale of Goods to private persons (OSS Standard Rate).

Scenario 2: OSS Tax Return Maintained Only for the Holding Company

The seller company XYZ is maintained as a subsidiary of the holding company HC (XYZ represents the seller company and HC represents the Holding Company).
The OSS Tax Return Arrangement is valid only for the holding company HC, while the subsidiary company XYZ has its own separate Tax Return Arrangement.

Although the holding company's Tax Return Type: 6 - OSS Tax Return is valid, it is not applicable to the subsidiary company because both companies have different Tax Return Arrangement IDs.
As a result, the system does not consider the holding company's OSS Tax Return Arrangement when determining taxes for the subsidiary company, and therefore Tax Code 580 is not determined.

Resolution

Scenario 1: OSS Tax Return Arrangement of the Seller Company Has Expired

Go to the Tax Management work center.
Navigate to the Tax Authorities view and open the Tax Authorities sub view.
Show All Tax Authorities and find the corresponding Tax Authority ID for Company XYZ.
Click on Edit.
Navigate to the Company Tax Arrangements tab.
Select Company XYZ and navigate to the Tax Return Arrangements sub tab.
Check the validity for Tax Return Type: 6 - OSS Tax Return.
Extend the validity period and save the changes.

Scenario 2: OSS Tax Return Maintained Only for the Holding Company

Go to the Tax Management work center.
Navigate to the Tax Authorities view and open the Tax Authorities sub view.
Show All Tax Authorities and find the corresponding Tax Authority ID for Company XYZ.
Click on Edit.
Navigate to the Company Tax Arrangements tab.
Select the holding company HC.
Navigate to the Subsidiaries sub tab the Company XYZ is maintained as a subsidiary.
Navigate to the Tax Return Arrangements sub tab.
The Tax Return Type: 6 - OSS Tax Return is valid.

Reporting OSS through the Holding Company is not supported.
The Holding Company and the Subsidiary Company have different Tax Return Arrangement IDs. Therefore, the Holding Company's OSS Tax Return Arrangement is not applicable to the Subsidiary Company.

This behavior is consistent across all EU countries.

Keywords

Tax Code 501; Tax Code 580; OSS Tax Return; OSS Standard Rate; One-Stop-Shop; Domestic Supply Standard Rate; EU Sale of Goods to private persons; Company Tax Arrangement; Tax Return Arrangement; Tax Management; Customer Invoice; Incorrect Tax Code; Expired Validity; Holding Company; Subsidiary Company; Tax Return Arrangement ID; EU Countries; OSS Reported; Not Supported; SAP Business ByDesign , KBA , AP-TTE-TC , Tax Calculation , Problem

Product

SAP Business ByDesign all versions