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try to use FRA1 condition type to represent custom tax.
---------------Original Message---------------
From: Mag Sai
Sent: Thursday, July 29, 2010 11:35 AM
Subject: China - Custom Tax, VAT Tax Handling
> Hi SAP friends
>
> I have the problem of Import custom tax and VAT tax for purchasing.
>
> It is Domestic Sales scenario. Need to purchase material from oversea vendor.
> Oversea vendor sell material to China company RMB 100 per PC.
> Mainland company needs to pay custom for custom tax 20% and the custom tax is non-deductible. Custom tax is 100*(20%) = RMB 20.
> Then, Mainland company needs to pay China government VAT tax(17%),
> VAT tax is 100*(1+custom tax)*(VAT tax)-100 = 100*(1.2)*(1.17) - 100 = 40.4
> So, VAT tax amount = Material price * custom tax * VAT tax
>
>
> In PO, I use ZOA1 custom condition type to input Custom tax amount for Custom tax and input Tax code for VAT tax.
> When good receipt, RMB 120 post to Material stock account. RMB 100 post to GR/IR. RMB20 post to custom account
> It still be fine.
>
> When do LIV, RMB 100 clear GR/IR. RMB 17 post to VAT tax account because it use RMB 100 as base amount to calculate VAT tax. RMB117 post to AP vendor account.
>
> Actually, mainland company only pays RMB100 to oversea vendor and the Tax amount should be include Custom amount. Correct VAT tax amount is 100*(1.2)*(1.17) - 100 = 40.4 (use RMB120 as base amount to calculate VAT tax), but not only RMB 17 . But, in LIV payment to vendor now is RMB120. It is not fulfill the requirement of mainland company.
>
> Do anyone have experience about China Import purchasing material. And, would share how to settle the payment of vendor and how to make use (Material price + Custom tax amount) as base amount to calculate VAT tax amount?
>
> Thanks a lot for your help!
>
> Mag
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