Note 34526 - Delivery free of charge and value-added tax

Summary
Symptom
You want to determine and bill Value-added (sales) tax for a delivery free of charge.
In this case, you can determine for each transaction

whether the customer pays the value-added (sales) tax

or whether the value-added tax (sales) is posted to a special account. This processing is required in
Italy, for example.

Other terms
Tax, VAT, MWST

Reason and Prerequisites

This note concerns a consulting problem.

Solution
The solution approaches below are only proposals. If you have further questions, please contact your
consultant.
This request can be set via a special pricing procedure. This requires that the delivery free of charge is
defined as relevant for billing.

Case 1:
-------

It must be possible to control whether the customer pays the tax or whether the tax amount is posted to a
special G/L account for each transaction.
The following steps are required:
1. Define new condition types or use existing condition types with the following condition records:
Z001 Surcharge/discount with 100 % Z002 Surcharge/discount with 100 % ZMW0 Tax
with 0 % e.g. tax code A0
Condition type Z001 can be copied from condition type K020,
Condition type Z002 can be copied from condition type K020. Set the 'Header condition' indicator in this
case.
Condition type ZMW0 can be copied from condition type MWST.
The condition records must result in a 0 % tax code for all combinations.
Reset the 'Group condition' indicator for all 3 condition types.
2. Define a new account key, for example ZFC, and assign the new account key to the G/L account
in question.
3. Define the pricing procedure:
Step PProc FrmStep ToStep Manu AcKey
---------------------------------------------

10
20
30
40
50

PR00
MWST
Z001
Z002
ZMW0

10
20
30

ERL
MWS
ERL
x ZFC
40
MWS

If the customer does not pay the taxes, you can achieve this by setting condition type Z002 manually.
Example:
PR00 200 USD
200 USD
MWST 15 % Basis 200
30 USD
Z001 - 100 % Basis 200 - 200 USD
ZMW0 0 % Basis - 200
0 USD
--------------------------------------30 USD
PR00 200 USD
200 USD
MWST 15 % Basis 200
30 USD
Z001 - 100 % Basis 200 - 200 USD
Z002 - 100 % Basis 30
- 30 USD
ZMW0 0 % Basis - 230
0 USD
--------------------------------------0 USD

Case 2:
-------

The customer always pays the tax.

The following step is required:
1. Definition of the pricing procedure:

Step PProc FrmStep ToStep Manu AcKey

--------------------------------------------10
PR00
x
20
MWST
MWS

Case 3:
-------

The customer never pays the tax; the tax is always posted to a
special G/L account.
The following steps are required:
1. Definition of a pricing procedure as in case 2
2. Determination of the cash account

For Release 3*:

3. Definition of a new account key, for example, ZFC, and allocation of the new account key to the desired
G/L account.
The G/L account used must not be tax relevant, that is, no tax may be sent in the master record of the G/L
account.

4. Use of a special billing document type and allocation of account key ZFC as 'Offsetting cash acount' when
allocating the pricing procedure for the billing document type.

As of Release 4*:
a) Use a special cash account procedure, for example, by copying the 'CASH00' procedure.
Maintain the setting in Customizing under:

-> Sales and Distribution

-> Basic functions
-> Account assignment/Costing
-> Cash account determination
-> Maintain condition tables
-> Maintain field catalog
-> Maintain access sequences
-> Maintain condition types
-> Maintain account determination procedure
-> Assign account determination procedure
-> Assign G/L accounts
b) Then assign this account determination procedure to your billing type.