In this blog, we will focus on the handling of intercompany transactions in KSA eInvoicing solution.
Intercompany transactions in KSA.
In SAP ERP, as you know Company code is the highest element in an organizational structure depending on which many other org elements are structured.
We may have multiple company codes created for one individual entity with individual VAT registration number as well as multiple company codes created for different legal entities with same VAT group VAT registration number.
From an eInvoicing perspective, the edocument cannot be between a buyer and a seller with same VAT registration number. This means that when your transaction is between two company codes that belong to the same group VAT number (11th digit of VAT number is 1) or between two company codes with same individual VAT (11th digit is not 1) where the customer side of the receiving company code is created as plant as a customer or an internal customer then such transactions should be excluded from the creation of eDocument in the cockpit as processing the same will result in error from ZATCA as shown in the following section.
In this case, you may either wish to either create eDocument's in the cockpit like other transactions and keep it unprocessed or you can simply exclude such transactions from the creation of eDocuments in the cockpit.
Intercompany validation rule
If you submit any transaction where the supplier's and the customers VAT number specified are same be it individual VAT number or group VAT number, you will receive the below error in the eDocument cockpit from the Fatoora portal.
As of 28.12.2022, You would not find this validation rule in the implementation standard document, but this validation rule exists.
How to exclude such intercompany transactions?
In general, documents without tax codes are considered not relevant for eDocument creation.
So, you may configure your system such that the tax codes are not required in your document for intercompany transactions.
If you wish to have a separate tax code as not relevant for such scenarios, you may follow the below fto exclude the creation of eDocuments for such intercompany transactions.
For FI documents
you can define separate document types and exclude such transactions by not mapping such document types with the eDocument type in the below path in customizing.
Cross-Application Components - General Application Functions - eDocument -Assign eDocument Type to Accounting Document Type
For SD billing documents.
you can define separate document types and exclude such transactions by not mapping such document types with the eDocument type in the below path in customizing
Cross-Application Components - General Application Functions - eDocument -Assign eDocument Type to Billing Document Type.