Tax registration in a foreign country - service orders

If you create a service order, LN stores the financial department of the order on the order header. Initially, the financial department is equal to the service department of the order and in this way, the initial tax country is the home country of the financial company of the service department.

LN only displays the financial department of the order if you select the Use Tax Numbers of other Financial Companies check box in the Tax Parameters (tctax0100m000) session.

The tax country can change in the following ways:

  • You enter or change the location address on the service order header. The Location Address of a service order determines the tax country.
  • LN determines the tax details of the first order line and this results in a different tax country.

If the tax countries of the service order lines differ, LN uses the following method to determine the tax country of the service invoice:

  • If the tax country changes and you defined a financial department for the tax country in the Financial Departments (tctax4110m000) session, you can change the financial department on the order header to the new tax country's financial department.
  • If the tax country of the next order line differs from the tax country of the first order line, you can change the financial department on the order header back to the service department and changes the tax country of the first order line to the tax country of the service order header.
  • The financial department of the service order header determines the tax country of all subsequent service order lines.

You can change the financial department on the order header if no financial postings exist for the order. If financial postings exist, LN displays a warning message.

The same rules apply to service orders created from a service call. The service department that owns the call does not invoice the customer and LN does not create any financial postings based on the service call.

Note

In Service, LN does not determine tax details for estimated cost lines. LN determines the tax details of the order lines when the actual lines are created if you release the service order.

The tax details of service cost types

The criteria to determine the tax details for material lines and for labor lines and cost lines differ as follows:

  • Materials

    The tax details are based on:

    • The buy-from business partner
    • The item
    • The cost component
    • The cost type
    • Whether the VAT is based on Services or Goods
    • The warehouse
    • Whether the material is exempt from taxation
  • Labor and Costs

    The tax details are based on:

    • The cost component
    • The cost type
    • Whether the VAT is based on Services or Goods
    • Whether the labor or cost item is exempt from taxation

As a result, the tax countries of the material lines, the labor lines, and the cost lines of a service order can differ. If you release a service order to Invoicing, LN determines the tax details for the labor lines, for the material lines, and for the cost lines, in that order.

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