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Vat- Non deductible and Deductible- Italy

Former Member
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Hi All,

While we are on the usage of Italy procedures, we came aZcross the deductible and non deductible tax codes to be done

i have worked around many ways from the TAXIT procedure , but the user requirement is as follows

Suppose i have created the PO of total price about 500/- and Vat code  say V0 = 21%, where the 50 % is non deductible and 50% is deductible

then the entries at MiRO level shoud be as below:

Vendor account :  -605 ( 500 + 105-which is the 21% of 500 )--- only vat to be added, is this possible and how ??

GR/IR  Account  : 552.5  ( 500 + Non deductible part of 21% Vat amount  i.e 50 % of 105)

Vat input A/c  : 105 ( V0 = 21% )

Vat inout A/c  : -52.5  (the other deductible part of vat v0)----  how to bring this  ??

I could do the few ways but  i am not able to credit  the deductible part to Vat input a/c as seperate line item and also the vendor account will be always the sum of GRIR + Vat input a/c in normal scenario

but here  user want to book only vat and total price of PO- let me know if this is possible through the std way or else i have to go with ABAPERs on this

i am awating your valuable replies,

Thank you ,


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Answers (1)

Answers (1)

Active Contributor
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The customizing steps are explained for 3 scenarios in OSS note 98181 - Acquisition tax and required Customizing

Former Member
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Anyone who has worked with Italy procedure would be great help

the given note did not help me much

Active Contributor
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Try creating two VAT condition types, one VAT condition type as VAT deductible and another VAT condition type as VAT Non-deductible.

Now you can have condition record with two VAT condition types separately by having tax code V0 with different tax rates.

Go for creation of new PO with tax code V0, do GR for new PO and then IR- cross check accounting entries for GR and IR.


Biju K

Former Member
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Hi Bijay,

I have done the condition types as deductible and non deductible but my question is at invoice level  the entries  are not as per user requirement

I am not sure whether to go with ABAP intervention because the vendor account should be always consider only the vat amount , not the deductible nor non deductible

Please let me know if there is any solution, thank you for the inputs provided



Active Participant
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Hello Preeti,

You are correct. By standard pricing procedure you can achieve this accounting upto GR but to make the accounting entries you need to take the help of ABAP. May be a Subroutine in Tcode VOFM can help you to serve this purpose.

Or you can ask the finance person who might have some other workaround. But try to achieve this via subroutine as SAP has given this option to handle these kind of issues only.