SAP FI - VAT Configuration

Adding VAT Codes

1. Check Calculation Procedure
   Tcode: IMG - Financial Accounting- Financial Accounting Global Settings- Tax on Sales/Purchases- Basic Settings - Check Calculation Procedure – Define Procedure

Tcode : OBYZ

Explanation:

Copy tax procedure TAXGB. Change it to TAXIN

These are standard Tax calculation procedure provided by SAP.

2. Assign Country to calculation procedure (Check country assigned to a tax calculation procedure)

Tcode: OBBG

Tcode: IMG - Financial Accounting- Financial Accounting Global Settings- Tax on Sales/Purchases- Basic Settings - Check Calculation Procedure – Assign country to calculation procedure

 

Each country has a tax calculation procedure assigned to it.

Here we can check what tax calculation procedure has been assigned to the concerned company code.

3. Check Access Sequences, Tax Condition Type


Tcode: OBYZ

4. Tax Jurisdiction structure


Tcode: OBCD

5. Sales & Use Tax Automatic assignment

Tcode: OB40

6. Define Tax codes for Sales and Purchases


Tcode: IMG - Financial Accounting- Financial Accounting Global Settings- Tax on Sales/Purchases- Calculation – Define tax code for sales and purchases

Tcode: FTXP

 

Here we define the tax rate for the tax code. Also map the G/L account to which tax amount postings are made

Easiest way to create a new tax code is to copy the existing tax code whose tax rate has to be changed in FTXP. Change description & rate

7. Steps in SAP for creating a new VAT code : EMEA

1. Check for the gaps in the table T007A for the new tax code to be created. (We need to check that a 2 digit tax code can be created, & it does not exist already)
2. Go to Tcode FTXP. Copy from the existing tax code, change the %, change the description, check the account mapping & save the new tax code
3. Please note the following before creating the tax codes

• In different tax procedures, same tax code can be created. However the mapping of Transaction Key& Account should NOT change.
  1. For example:
  2. Tax code1V can be created in Tax Procedure TAXAR, TAXPT & TAX_NB. However, Transaction Key VST = 11005000 in all the tax procedures.
• Never change an existing account mapping as that will affect countries which are already using that code
• A tax code like 1V can have different tax rates in different tax procedures but ACCOUNT MAPPING remain the same. To check all tax rates used for a tax code use report S_ALR_87012365

8. Advance Return for Tax on Sales/ Purchase


Tcode: S_ALR_87012357

 

Page 1 shows totals for Output tax by Tax Code.

Page 2 shows totals for Input tax by Tax Code.

Page 3 shows totals for each company code selected, by Tax Code.

Page 4 shows totals for all company codes selected, by Tax Code.

It is necessary to clear the amounts in the Tax Clearing account to ensure that the tax payable/receivable to Accounts Payable or Accounts Receivable, is created in order to be paid via the automatic payment program (F110) or paid and cleared via the Incoming Payments (F-28) procedure. Although the above procedure calculates and posts the tax payable/receivable to the tax payable/receivable account, this account needs to be cleared and paid.

The tax payable/receivable Account is managed as 'Open Item' and as such a clearing procedure needs to occur in order to pay the values to the Statutory Authorities. Therefore, the value of Tax to be paid needs to be identified. This can be achieved by an inquiry on the tax payable/receivable account in the general ledger by posting dates and unclear items.

9. Tax Posting (AP/AR)

• Tcode: FB41

10. VAT Configuration
11. Configuration steps : Basic Settings, Calculation, and Posting

1. 1. SAP uses condition types (e.g., MWAS sales tax and MWVS input tax) as the basis of a calculation procedure, which enables integration between the SD, MM, and FI modules.
   2. Create an Access Sequence (MWST Tax Indicator) and underneath it an access code (10 (Table 3) Tax Code).
   3. Create a calculation procedure for each country or jurisdiction for which you need one (for example, TAXF = sales tax for France and TAXIT = sales tax for Italy). Behind this you put a control procedure, which defines the calculation steps (TAXF).
   4. Procedure TAXF Sales Tax – France:

12. Next assign a country to a calculation procedure (AT Austria = TAXAT).

1. Check and change settings for tax processing as follows:

13. Define tax codes, which will be used in transactions. (Tcode: FTXP)

 

Finally, tax codes have to be allocated for non-taxable transactions, outside the scope of VAT (e.g., general ledger journal entries between accounts which require a valid tax code) – e.g.:

 
   
When configuring VAT processing it is also necessary to maintain Table TRVOR (with transaction code SM31) and enter the company code and fiscal year against the ABAP which runs the advance tax return (e.g., RFUMSV20 for Italy and Spain prior to Release 4.6C) and against the ABAP which runs the document journal (RFBELJ10). Otherwise the report will not run and the error report does not tell you much except to point you towards Table TRVOR.

This table links the company codes to the ABAP used to run the document journal RFBELJ10 and to the ABAP used to generate the advance tax return RFUMSV00 (and previously RFUMSV20). It is essential to maintain it or the advance tax return will not run.