Taxes in down payments recieved and paid

Q1: I receive the down payment (prepayment) from customer and SAP generates posting

Dr		Bank	118
Cr		Customer Down Payment	100
Cr		Output VAT	18

 

Why does system behaves itself wrong way? It should be

Dr		Bank	118
Cr		Customer Down Payment	118
Cr		Output VAT	18
Dr		VAT from down payments received	18

A: System will use special GL account "VAT from down payments" when several prerequisites are met:

• Customer line items has Special GL indicator of "down payment" type. Check this in transactions OBXR.
• Reconciliation account for the customer down payment should have tax category +B. Alternative GL account is defined in the same transaction OBXR. Tax category of GL account can be checked in transaction FS00.
• Postings should contain tax code with "Output tax" category. This can be checked in transaction FTXP.

"Output VAT" GL account number is set up in tax code (the same transaction FTXP).

"VAT from down payment received" GL account number is set up in transaction OBXB for MVA transaction. You can specify the same clearing account for all down payments, or split them using the clearing account identificators. If you want to use split functionality, please tick the "Output tax clearing" checkbox in the rules for MVA transaction. Then you can specify different clearing account for different identificators in transaction OBXB. These identificators are assigned to Special GL indicators in transaction OBXR.

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Q2: I pay down payment (prepayment) to vendor and SAP generates posting

Cr		Bank	118
Dr		Vendor down payment	100
Dr		Input VAT	18

 

Why does system behaves itself wrong way? It should be

Cr		Bank	118
Dr		Vendor down payment	118
Dr		Input VAT	18
Cr		VAT from down payments paid	18

A: System will use special GL account "VAT from down payments" when several prerequisites are met:

• Vendor line items has Special GL indicator of "down payment" type. Check this in transactions OBYR.
• Reconciliation account for the vendor down payment should have tax category -B. Alternative GL account is defined in the same transaction OBYR. Tax category of GL account can be checked in transaction FS00.
• Postings should contain tax code with "Input tax" category. This can be checked in transaction FTXP.

"Input VAT" GL account number is set up in tax code (the same transaction FTXP).

"VAT from down payment paid" GL account number is set up in transaction OBXB for VVA transaction. You can specify the same clearing account for all down payments, or split them using the clearing account identificators. If you want to use split functionality, please tick the "Input tax clearing" checkbox in the rules for VVA transaction. Then you can specify different clearing account for different identificators in transaction OBXB. These identificators are assigned to Special GL indicators in transaction OBYR.