BYD2408 Tax determination in Intercompany scenario

[SAPSupport]

Dear SAP Team,

This is regarding the Tax determination logic in IC PO in cases where Ship-To is different from Bill-To, where Ship-To address is being picked for Tax determination .
Typically in most of the our IC scenarios, the Bill to = ship to and in these cases the Tax Determination rule set up is fine. But there are cases where Ship-To is different from Bill-To, and in these cases Customer address in being picked for Tax determination .

Since the client is a provider of Services, the system should always pick Bill to Address for Tax determination . Is there a provision to change this behavior in standard SAP ?

BR,

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[SAPSupport · Accepted solution]

Dear Customer,

In your scenario, you have mentioned that Ship-To is different from Bill-To, and in these cases Customer address in being picked for Tax determination. 
The answer is Yes and it is correct. 

In purchasing, always system determines the taxes based on the destination principle. Meaning, the taxes are levied where the products or services are delivered. So when you enter customer, system picks this address as a base for tax determination. 

For transnational business transactions, the system uses a tax decision tree for both the ship-from country and the ship-to country to determine the taxation method used in the tax event for each country. The relevant decision trees are determined by the tax countries entered in the document, in particular by the countries of the supplier and the goods recipient. 
Other tax jurisdictions can be the:
-Location of the business residence of the seller who provides a service
- Location of the business residence of the buyer for whom a service is provided
-Location where the service is to be provided

The appropriate method for calculating tax is determined by a combination of tax type, tax event, and tax rate type, and by the deductibility type for the input tax of the sales volume.

Each tax code represents a unique combination of the following parameters:

In sales: 
Tax event
Tax types
Related tax rate types

In purchasing:
Tax event
Tax types
Related tax rate types
Deductibility types

Hope it clarifies. 

Best Regards,
Arun