VAT tax with third party order processing

[former_member341563]

Hello,

we are a US company with an office in India. We do not warehouse anything but will only do third-party orders (drop-ship) for India which means goods will be shipped from a third-party vendor directly to the customer. We want to do the tax determination (VAT, service tax etc.) in SAP. Since the taxes depend on the state that the goods ship from, we were told we need to create a plant for each state where we use third-party vendors and use this plant in the sales order line item so that is uses the correct VAT registration number for the state which we maintain for the plant.

Is there any other way to calculate correct taxes in SAP without having to create a plant for each vendor state?

Regards,

Achim

[BijayKumarBarik]

Hi,

You do not want to create plant but you want VAT to be calculated based on vendor state.

Better create tax condition table with condition keys as County key, Region, Company code and Vendor

Create a tax access sequence and assign new tax condition table.

Configure tax condition types with VAT condition type and includes all in tax procedure.

Now maintain tax condition record for vendor based on Region with VAT tax condition type to have VAT tax rate.

Regards,

Biju K

[former_member280154]

Achim,

I am assuming that you are talking about VAT output tax to the customer based on region where you're procuring from.  I don't think there is a standard way of doing this because at the time of sales order creation you do not know where you're procuring it from. Even with creating a different plant, how are you planning to determine a different plant each time based on vendor location?

If you're planning to maintain the plant manually, you could as well maintain the tax condition manually instead of plant.

Please let me know if this makes any sense.

-Sri

[former_member341563]

Hi Sri,

thank for replying. Yes, it's about VAT tax that we charge the customer in India based on the state the vendor ships from directly to the customer. In standard SAP, the VAT registration number is pulled from the plant. We do know which vendor will be used based on the part number and info record.

We don't want to create a new plant for each vendor we do business with and use it in the order item but instead use the same plant for all India business and get the registration number from the vendor for the drop-ship item. Does that make sense?

Regards,

Achim

[former_member280154]

Achim,

Understood your approach.

But how do you have access to Vendor information during sales order creation?

-Sri