What's the difference between legal classifications and fiscal classifications?
Every legal classification is associated with a legal entity. This legal entity gives it a legal status in a country and also guides the tax determination process.
Fiscal classifications tell you when taxes apply to a party, how much tax applies, and what percentage of the tax is recoverable. Trading Community Model defines both legal and fiscal classifications.
In some countries, legal classifications are defined by:
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Business activity type
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Business activity code
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Business activity description
You can use legal classifications for fiscal classification purposes. This makes legal classification just another party fiscal classification for tax purposes.