Maintaining Tax Code Determination

When data flows to VIM from external systems like an OCR system, the tax code may not be supplied. However, for auto tax calculation, the tax code is important.

Therefore, VIM provides a tax code determination rule that tries to determine the tax code corresponding to the supplied tax rate.

The tax code determination works whenever there is a supplied tax rate. See “Tax calculation Group” on page 62 for details.

To maintain tax code determination:

1. Execute the /n/OPT/SPRO transaction and follow LiveLink VIM -

Configuration > Document Processing > Document Type Configuration >

Maintain Document Types.

2. Double-click a line to open the Document Type Definition Details screen.

In the Tax Code Determination group, the options for tax code determination are displayed. The following options are available:

• “SAP Tax Determination Logic with OT Tax Table (Simple Maintenance)” on page 64

• “Tax Determination using OpenText Tax Table (Simple Maintenance)” on page 65

• “SAP Tax Determination Logic” on page 66

• “Customer Tax Determination” on page 66

Note: Select the Tax Code from Vendor Master check box to retrieve the tax code from Vendor Master in case any of the other options fails to retrieve the tax code.

Tax calculation Group

In the Tax calculation group of the Document Type Definition Details screen (see screenshot above), you define the tax calculation options for the DP document type.

The following options are available:

Auto Calculate Tax

Select this check box if you want the system to calculate the tax based on the tax code either supplied explicitly during the indexing stage or determined by the system from the supplied tax rate.

Allow Zero Tax Rate

Select this check box if you want the system to determine the tax code for a 0.00 tax rate (zero tax rate). If blank or empty is supplied, the system cannot

determine the tax code, so the value should be 0.00 or greater.

Allow without Tax

Select this check box for scenarios without input tax, that means, nothing is supplied from tax perspective and you still want the system to carry it forward.

Note: This option only works if Auto Calculate Tax is not selected.

Calculate Tax on Net

New feature with VIM 5.2 SP6 for Non PO DP Approval: Use this check box if you want the system to differentiate between gross and net. The check box is document type specific instead of user specific, because approval might be accomplished by several different users.

As a prerequisite, you must configure the global constant CALC_TAX_ON_NET. See

“Configuring Tax Calculation on Net Amount” on page 259 for details.

If the global constant CALC_TAX_ON_NET is set to D, you can define Calculate Tax on Net document type specific in the Document Type Definition Details screen:

• Select the Calculate Tax on Net check box to define that G/L account amounts are to be entered net.

• Clear the Calculate Tax on Net check box to define that G/L account amounts are to be entered gross.

SAP has two different tax flags that control the line amount and balance on the Non PO parking screen and VIM Non PO parked approval:

• auto_calc tax flag that is document specific.

• calculate-tax-on-net-amount flag that is user specific.

In the past, VIM had only the auto-calc tax flag for Non PO DP approval. The calculate-on-net-amount tax flag, known from Non PO processing, was not available for DP documents. VIM interpreted the missing second flag as being empty. If the auto-calc flag was selected, the gross amount was expected in the Non PO DP line items.

The following combinations are possible with the two tax flags:

Test

If auto_calc is selected and calculate-tax-on-net-amount is not selected (Gross), the line items have to be filled with gross amount.

All other combinations require net amounts in the line items in order to have a correct balance.

Test Case 1

If auto_calc is selected, and calculate-tax-on-net-amount is not selected (Gross Amount, tax included):

Balance = Header Gross amount - (sum of all line item amounts) Test Cases 2 and 4

If auto_calc is not selected (Net Amount):

Balance = Header Gross amount - (tax amount in header + sum of all line item amounts)

Test Case 3

If auto_calc is selected and calculate-tax-on-net-amount is selected (Net Amount, no header tax available):

Balance = Header Gross amount - (calculated tax + sum of all line item amounts)

CALCULATED TAX = sum all (line item amount * tax rate on the line)

Tax Jurisdiction Code Determination

Tax procedures that have tax jurisdiction codes need to determine tax jurisdiction first. The system checks the following to determine the jurisdiction code:

1. If a PO line exists, the system tries to retrieve the jurisdiction code from the PO line item.

2. If the PO line item does not contain a jurisdiction code, the system checks for a jurisdiction code based on the plant for the PO line item.

3. If still no jurisdiction code is found or if the invoice is a Non PO invoice, the system picks up the jurisdiction code from the vendor master.

Note: If no jurisdiction code is found for tax procedures with jurisdiction code,

Possible Reasons for Tax Code Determination Failures

If the tax code determination fails, consider the following possible reasons:

• The PO line item tax code does not match the tax rate supplied.

• There are multiple tax codes belonging to the same tax rate supplied.

• A tax rate may match with one tax code but the tax code contains multiple rates.

• The tax jurisdiction code has not been determined, in case a tax procedure with jurisdiction code is used.

For example, the United States have the TAXUSJ tax procedure with jurisdiction code.

If the tax code determination fails, an Invalid Tax Info exception is raised in the VIM Analytics report, see screenshot below. In this case, the workflow is routed to the Tax Expert for further actions.

5.1.8.1 SAP Tax Determination Logic with OT Tax Table (Simple Maintenance)

This option uses the following logic:

1. The system reads the tax code from the PO line and checks if the tax rate supplied by the external system matches uniquely. If the tax code exists in the PO line item and no match is found, the tax code is considered to not determine and the system stops checking further.

2. If the tax code does not exist in the PO line or the invoice is not a PO invoice, the system proceeds as follows:

a. The system checks all tax codes of input tax type for the country and checks if the tax rate supplied matches uniquely with only one tax code. If no match is found, the system proceeds further.

b. The system selects the tax code from the OpenText table based on the tax rate (Simple Maintenance). See “Tax Determination using OpenText Tax Table (Simple Maintenance)” on page 65.

c. If the above step does not result in a tax code match, the system retrieves the tax code from Vendor Master if the Tax Code from Vendor Master check box is selected in the DP configuration. The system checks if the vendor tax code contains only one tax rate and if that tax rate matches with the tax rate supplied. If it matches, the tax code is determined.

Note: If the tax procedure with tax jurisdiction is used, the jurisdiction code is determined first and this code is used in conjunction with tax code to retrieve the match. For details on the jurisdiction code determination, see “Tax Jurisdiction Code Determination” on page 63.

5.1.8.2 Tax Determination using OpenText Tax Table (Simple Maintenance)

This option uses the following logic:

1. The system reads the tax code from the PO line and checks if the tax rate supplied by the external system matches uniquely. If the tax code exists in the PO line item and no match is found, the tax code is considered to not determine and the system stops checking further.

2. If the tax code does not exist in the PO line or the invoice is not a PO invoice, the system proceeds as follows:

a. The system selects the tax code from the OpenText tax table based on the tax rate (Simple Maintenance).

To maintain the Tax Code Determination Configuration:

1. To maintain the table /OPT/VIM_TAX_CFG, execute the /OPT/VIM_BL_TAX_CFG transaction.

2. For a given Country key and Vendor ranges, maintain Tax Rate versus