Tax on Free Goods

My customer receives free goods (samples) from vendors. They are flagged on the PO as Free. This deletes the Invoice required flag. There are some countries that require taxes on these item. They want to enter the follow up invoice with MIRO referencing the PO, but they cannot post, as no items from the PO have invoice to reference. They use trasaction FB60 as a work around. Does anyone have a better way to enter the invoice with reference to the PO, preferably using MIRO.
thanks, Jim

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Tax on Free Goods (help required)

the problem i m facing is this i configured a princing procedure and in process there is also a process of free good i used nrab and r100 but its not excluding the sales tax and its charged to customer
i changed the procedure now the customer is charged with accurat problem but the probelm is that the the Tax is effecting the net value field as well (VBAK-NETWR) and its going to effect the standard reports any solution that the tax value also become 0 . coz the company bear the taxes for the free goods

Hello Abaper,
In your pricing proceedure remove the MWST condition type.
This should solve your problem,
Reward if helpful.
Thanks
Murtuza

Tax in Free Goods Pricing

Dear Gurus,
Need ur help to resolve the problem i'm facing in my Free Goods Pricing.
I have used r100 condition type before the tax calculation with 55 and 28. I'm able to bring the net value to 0 but the tax is still calculated and the same is posted to the customers account. As the deal is free of charge the customer is just issued the goods and is not entitled to pay a single penny.
My Pricing
PR00
Freight
BP+Frgt
Excise
BPFrgtExcise
r100
Net Price
VAT
Net Price
Awaiting your recommendations
Rgds
Suresh

i'm calculating the exicse in my procedure. In the SO the net value is shown as 0 but the tax is calculated. In the accounting document following are the entries...
Posting Key   Description                       Value
01     Customer                          701.76
50     Revenue                    5,000.00-
50     Freight Recovery     230.00-
50     BED recovered sales     600.00-
50     ECes recovered sales     12.00-
50     SHECerecovered sales     6.00-
40     Deduction                5,848.00
50     AR VAT Payable - And     701.76-
What i require is that the customer payables should be Zero and that amount needs to the added to the total deduction amount.
Awaiting your valuable suggestions
Rgds
Suresh

Accural tax for free goods

Hi, friends!
     Under Chinese tax law, free sample goods sent out to customers also are due for output tax. The related accounting documents are as below:
     Debit: sales cost
     Credit: inventory
     Credit: accural tax -- output tax
    How to make a configuration in pricing procedure and billing? Please give a hand to me. My mailbox: [email protected]
    Thanks!

Some of the clients, the tax is complex in business and there is need for accruals, you maintain accrual account keys and corresponding provisional GL accounts. The same business requirement arised in my present project same I approached the same way.
Hope this helps
Suddu

Service tax on free goods issued to contractor

As per recent notification of Service tax dept., company has to pay service tax on cost of free goods provided to contractor. How to configure this scenario in MM?

This is last option. Is it possible to create one discount condition, which knocks off gross value of material but maintain base value for Service Tax?

TAX on free good item

Dear Gurus,
how can i calculate tax on a free good item and post it to a different GL account withotu having it show up on the output tax line of the sales invoice? this free good tax needs to be calculated and absorbed by the company, not passed on to the customer. the customer must only pay tax on what he buys and not what he qualifies to receive free of cost.
Regards,
ottley

Hello
What our friend Mr.Raja singh suggested is very correct but he missed out there needs to be proper alignment of FROM and TO steps in your pricing procedure
The FROM and TO steps in your pricing procedure for R 100 condition type should exclude the step no of MWST ( this statement may be confusing to read but once you work in the system you can get it)
By doing so suppose if there is a material X say price is 100 $ each and there is an free offer of 10 + 1 material X and say there is a tax of 4 %
In normal case when you order 10 units of material X you will get 11 units of material X and the cost would be 1000 $s + tax 40 $s so total would be 1040 US dollars (tax is calculated for 10 items not the free)
If you follow the steps as suggested by Mr.Raja singh + proper alignment of FROM and TO steps in your pricing procedure the same order would be of cost would be 1000 $s + tax 44 $s so total would be 1044 US dollars (tax is calculated for 11 items
which includes the free item also)
I dont understand what is the negative value which you are talking about
Regards
Raja

Output tax for free goods

Hi All,
Appreciate your inputs on the following tax scenario. We need to book out tax for things we give for free to our employees.
Example: We are buying laptop bags from a vendor to give for free to our employees. We pay for example 10% VAT
This will be direct FI invoice where the tax incurred will be absorbed in as expense as we cannot claim input tax credit for this.
This means the input tax code will be zero rated.
The requirement here says, as per the legislation we need to account for output tax under deemed supplies for these free items.
As we are giving these items for free to the employees whom we cannot bill.
In this scenario how do we account the output VAT. Can this be automatically posted in SAP or will this be an manual journal entry.
In any case what will be the accounting entry for this.
cheers
Viru

Hi Viru,
I suggest you may use AR Invoice to issue the item to record output vat.
You may just create dummy customer or set the employee as Customer BP and call it in AR Invoice, then select the item with its corresponding vatable amount, just tick the Tax Only option to recognize only the vat amount of the item. Then to close the debited AR, you still use the Incoming Payment to close the AR invoice at the same time, then choose cash for example (or any other payment means) just change the GL Account to any account you wish to be debited the amount of your output vat.
Regards

Free goods determination & Free of charge Delivery

Hello Gurus,
Actually I have couple of queries regarding free goods.
1) Can we manitain free goods for BOM
Business Scenario - I have created a BOM "ABC" at Main item level (ERLA) with components B, C and want to give 2 different Items X, Y as free goods other that sub components. So is it possible to assign TANN itm catg with TAQ, will it work ? what will happen with taxes for free goods?
Tool Kit, ABC----(TAQ)
                 B -
(TAE)
                 C-----(TAE)
                 X------(TANN)
                 Y------(TANN)
if not possible what will be solution to map the above scenario ?
2) How to maintain the Free of charge pricing procedure?
                       I maen what condition types should we maintain into the free of charge pricing procedure control data (V/08)? If there is a standard pri pro for Free of charge delivery plzz Suggest to me.

Hi,
1. Application of Free Goods in BOM is not posible. Moreover Free goods attract zero value only the material document is updated.
I can suggest you to use the process "Rebate of a Kind" where in you can manually enter the subproducts as free goods only thing is you will have to mention main item lineno in the higherlevel item categor of the sales order.
Though i tried long back the requirement you need, it will not work the best way is to give manually in SO.
2. Free sample maintain seperate process i.e, Document Type, item category Pricin Procedure.
For Configuration please check Img -->SD --> BF --> Free Goods --> Condition Technique free goods
-- Better you maintain "C" Document type while doing determination.
Regards
Sathya

Tax Calculation of free goods

Hi
We have a requirement where the client wants only VAT to be posted in GL accounts and not the price.For this I tried free goods condition type R100 with AltCBV 28.But the VAT value is also coming zero. I want the VAT to be calculated on Pricing condition and then give 100% discount.
Apart from this I also tried to make pricing condition statistical and calculate VAT on it but then also system gives zero value for VAT.
Also wondering if the scenario can be addressed with Free of Change Dellivery.

Hi
Normally in scenario where you are dealing with samples , there are cases you have to charge only TAXES / EXCISE part.
Here my SUGGESTION is you can handle this through a simple sales order process, where you have to configure a new pricing procedure.
1. Create a new document type to handle samples.
2. Create a New pricing procedure where you can keep the basic price condtion as Statistical and rest all same as wht is is there your main pricing procedure. Just juggle with the TO-FROM to capture the TAX part in the total.
3. Doc pricing procedure will help you to pick the new Pricing procedure
4. Now Process this as a normal sales order
5. This new document type will help you to have a proper reporting.
The only constraint here is USER has to punch a fresh order seperately for such scenario. He cannot give a free good in the same sales order which is used as standard.
The other way is you can configure a FREE GOOD Determination procedure as suggested where you need to then have your Single pricing procedure accomodating the same scenario.
Thanks
RB

Free Goods Import Process with Customs, Freight, and Other Taxes.

hi,
I have to import free goods but have to pay for Customs, Freight, and other Taxes.
1. If I tick Free Goods Indicator in PO Line Item, Condition Tab at line item disappears. It will not to calculate other conditions at Header level also. - So I cant execute this option.
2. If i take price of material and insert Condition Type: R001:Discount/Quantity with material price/qty, then it gives Error Message - "Price Must be greater than 0".
So, Is there any way through which I can procure Free Goods and can maintain conditions for Customs, Freight, and other Taxes in Purchase Order.
Please help me in this regard.
- Jignesh

Hi,
1) Create an import PO in ME21N with material price and all custom duty conditions (as you normally create). no need to put free tick indicator.
2) Process MIRO for goods and delivery costs simultaneously.
3) Maintain zero amount for goods item and actual values for the duties (Ensure selection of goods item including delivery cost items)
4) Save the LIV document
5) Check PO item history got updated with IR-L and DCIn. (IR-L will updated with zero amount)
6) Do MIGO w.r.t. IR document number.
7) GR FI document will get updated with the non-set off duty values only.
Regards
Rajesh

Free goods - exclusive - tax calculation

dear Collegues,
I have an issue, my client want me to configure Free goods exclusive ie 10+2 offer, but when i am creating a sales order or billing, the Net value will be for 10 items, Excise will be calculated on 12 pieces as its a manufacturing unit, and the tax must be calculated only for 10 piece how can i do this, Kindly suggest me.
regards,
Sudhir

Sir
For this requirement only the suggestion was sent earlier
You have to achieve thro alignment of steps and from and to in PP
In real sense this settings is a challenge for any SD consultants ablitity
It is difficult for me to explain step by step without looking at your screen or without knowing what are all the condition types you are having in PP
Pls let me know what are all the condition types you have in your PP and their alignment
Because it can be achieved in standards
Sir
Have you got this correct?
Once you do the correct settings you yourself will wonder is it this simple?
The importance of From and to and the importance of alignment of steps in PP does the trick here
All the best
Regards
Raja
Edited by: ramanathan raja on Jan 8, 2009 12:07 PM

How to put Free goods with taxes in Sales Order?????????

Hello All
I am facing a problem that in my country the taxes should be paid for the free goods also that means if I sold 100 PC of material X and I gave 2 free pieces I will pay taxes for 102 PC but the system calculates the taxes for only the main 100 PC
Regards
Jacopo Françoise

HI,
When we dont to apply taxes we uses Normal process where we assign higher level item category to free good item category , and we determine it as TANN.
But to able to consider free good for taxes perpose we need to add R100 item category in pricing procedure with requirement 55 and Alternative condition base value as 28.
Along with that we have some setting in Item category whr you need to maintain B in Pricing relevence field (Pricing for free goods ).
With this setting you problem will be solved
Regards
Amol S

Value-added tax problem about free goods!

Hi All,
I've got a value-added tax problem.....
Can anyone can come out with a solution.
Here is the Business Scenario....
One product company offen give some free goods to its customer company for test or probation. In pricing, the free goods have no income so that the value-added tax is zero, but by the law, the product company must pay the VAT(value-added tax) base on the cost of the free goods.
How to implement this in SD R/3 Scenario...
Can any one of you suggest me a solution for this plz..
Regards,
wang-yuzhen.

Hi,
You need to bring in a consition type "VPRS" in your pricing procedure. The VAT will be determined based on this condition type. VPRS is a statistical condition type. That means eventhough it appears with a value it will potentially not be displayed in your invoice. The invoice value will be 0 and there will be no account posting for this condition type

Shipping Charge for free goods Error FF805 Tax statement item missing o0

Hi,
We handle a lot of free goods and Subsequent deliveries which are free of charge.
The item category has been set "relevant for billing" and "100% discount (B)" for relevant for pricing.
We have absolutely no trouble in billing and creating the accounting document for the free goods.
However, sometimes the client would like to charge shipping/handling/freight cost to customers on this. In this case (the net value is 0 and freight will have some amount), billing document is generated as expected but accounting document doesn't.
We get the error "Tax statement item missing for tax code O0" FF805"
We think this happens because the net value being $0.00.
In pricing procedure all the shipping and tax condition types have requirement '2' (and I tried with blanks also)
How to correct this issue? The client wants to bill the customer for freight even if net value is $0.00.
Helpful answers will be rewarded.
Thank You,
Manoj

Hi Manoj
Firstly , Check wheather the tax code O0 is assigned to MWST condition type in VK12 .
Secondly check wheather that tax code you assigned is an input / output tax .
Finally check what tax procedure has been assigned . and check wheather that tax code is available in that tax procedure or not
Regards
Srinath

Free Goods (Tax not charged to customer)

Hi to all Gurus
I m using inclusive free good and for this i am using R100 and NRAB the problem i m facing is this in case of compnay in which we are working tax on free is beared by the company not the customer.Now when i include the Taxes amount to R100 Discount value the Tax total figure is passed on to Net Value field for that item and it also effect the total net value by the tax amount because the tax is coming with - in net value(NETWR) and + in tax field (MWSBP). But the GL enteries are working fine this problem is only effecting the Net Value Field which is used for Standard Reports
I have also tried all the condition routines i.e 2 ,4 ,55 ,28,59,29
Kindly all of u through any solution to my problem

Why dont u use "Pricing For Inclusive Free Goods Without Item Generation"
To do this, you can use the standard condition type NRAB. It is set up as follows:
It does not determine the discount from the condition record. It uses condition basis formula 029 in the pricing procedure to determine a discount from the free goods factor.
The condition receives the new pricing requirement 059 in the pricing procedure. This requirement checks whether free goods have already been determined.
The condition type receives condition category f. This condition category ensures that the condition is redetermined every time the quantity is changed, since this can also mean a change to the free goods quantity.
Hope this helps & Rewrad if does
Rgds

Tax on Free Goods

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