Service tax rules, tax code, and tax country

If the tax code is based on services, service tax rules apply. In EU countries, the tax code as specified for the related service department will be defaulted. The user can enter or change the tax code on the contract or order header, which is then used as a default value for the activities and the actual cost lines.

Tax code based on goods

If the tax code is based on goods, the service is treated as a sales order to sell goods. The items to be sold will be registered on the actual material lines, and usually no (service) labor will be entered. The tax code on the order header will be disabled, which enables you to enter the tax code on the actual material lines. This tax code is derived from the sales item data.

Note: Destination Sales Tax functionality is covered by the applicable sessions in Common and the Master Data Management module in Service.

Tax country

The tax country is based on the location address of the service order. If the order status is Free or Planned, changing the location address can result in a change of the tax country and tax code. If the order status is Released, you can no longer change the tax country and tax code, because actual lines can already be present.

Note: The VAT rate option ( VAT Based on Services or VAT Based on Goods) is available for service orders and maintenance sales orders. In the Maintenance Sales Control module, Delivery and Receipt lines enable you to treat a maintenance sales order as a sales delivery.