What is non-deductible input VAT in SAP SRD-FIN-ACC - FIN-Financial Accounting?

SAP Term: non-deductible input VAT

• Component: SRD-FIN-ACC

• Component Name: FIN-Financial Accounting

• Description: A tax already paid to a vendor that cannot be balanced against output VAT. Taxable persons pay input VAT to vendors and output VAT to the taxation authority. One part of the input VAT, the deductible input VAT, can be balanced against the output VAT, that is, a business pays tax on sales and purchases only on its own added value. The other part, the non-deductible input VAT, is excluded from this arrangement and depends on the applicable tax law of the appropriate country.

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• Key Concepts: 
  Non-deductible input VAT is a type of value-added tax (VAT) that cannot be deducted from the total amount of VAT due. This type of VAT is typically applied to goods and services that are not considered to be business-related, such as luxury items or entertainment expenses. 
  
  How to use it: 
  In SAP, non-deductible input VAT is recorded in the system as a separate line item on the invoice. This allows for easy tracking and reporting of the amount of non-deductible input VAT that has been paid. The amount of non-deductible input VAT can then be used to calculate the total amount of VAT due. 
  
  Tips & Tricks: 
  It is important to ensure that all invoices are correctly coded with the correct type of VAT, as this will ensure that the correct amount of VAT is paid and reported. Additionally, it is important to keep track of any changes in the rate of non-deductible input VAT, as this can affect the total amount of VAT due. 
  
  Related Information: 
  For more information on non-deductible input VAT, please refer to SAP's documentation on SRD-FIN-ACC FIN-Financial Accounting. Additionally, you can find more information on value-added tax (VAT) in general by visiting the website of your local tax authority.