A regular requirement in European Union (EU) is to move inventory to warehouses across boarder. In many cases, this inventory movement might just be for logistical movement of goods for eventual sale or primarily for storage and might not be for any manufacturing value add to the product. These warehouses might have their own independent VAT registration number. Given the INTRASTAT regime in EU, there are requirements to not just record such movements but also report them separately for the warehouse in INTRASTAT and VAT reports submitted to the legal authorities.
This whitepaper discusses proven SAP standard Plant Abroad solution for such cases of cross-border inventory movements in EU and its associated VAT accounting and reporting requirements.
Note: Sound understanding of EU-INTRASTAT requirements, Taxation and SAP MM-FI integration is a pre-requisite to this reading.
The following Scenario explains the key requirements
Company code in Germany and warehouse in Sweden with cross border inventory movement between them.
Sweden Warehouse is not a company code and doesn’t do any manufacturing value add to the product but has a separate VAT and INTRASTAT registration number and needs to do its own reporting on VAT and INTRASTAT.
Goods are transferred from within EU i.e from Germany company code to Sweden warehouse
As per EU VAT reporting requirements, VAT postings should happen for the goods movement to show credit and debit entries for VAT in the same document so that overall VAT impact is nullified for the scenario under
Critical to Quality for this Solution (CTQs) to work are as listed below
Ability to assign VAT registration from different countries to one company code in EU
Correct value-added tax (VAT) registration number prints on sales and purchasing documents
Calculates the right VAT
Handles stock transfers
Conducts VAT and INTRASTAT reporting correctly
SAP Standard Solution:
SAP provides Plant Abroad Functionality for EU to address the requirements
Reference SAP Notes:
Oss note 63103
Explains logic regarding tax procedures if you are using plants abroad
Oss note 1085758
Customizing for stock transports
OSS note 850566
If you activate plants abroad then this will be activated for all company codes within one client.
Oss note 850566
deactivate plants abroad for a particular company code
Impact Consideration: Following impacts would need to be considered while deploying the SAP plant abroad solution for an organization that is already on SAP
Impact - Considered
Cross-Client FI impact. Some new fields become activated once you set this function. You enter them in the following activities:
1. In the Define Countries activity in the Global Settings IMG, you have to enter:
Country currency for the tax return
Exchange rate type (usually "M")
Indicators for the tax base and cash discount base
For all company codes that do not require a tax code for 'Plants
abroad', you can maintain the parameter "Plant abroad not required" with 'X' (Transaction "OBY6") under "Additional entries"
2. In the Define Tax Codes for Sales and Purchases activity, you have to enter the Reporting country for the tax codes by choosing Properties.
3. You make the remaining settings in the Define VAT Registration Numbers for Plants Abroad activity
The activation of plants abroad has also consequences for the VAT report (RFUMSV00 program). Here you need to enter/activate additional parameters which are the following:
•Reporting country / tax return country
•Country currency instead of local currency
Compliance to EU VAT and INTRASTAT reporting
Clear end to end audit trail for each inventory movement and related accounting
Standard SAP solution
Financial Accounting-->Fin Act Global Settings-->Tax on Sales/Purchases-->Basic Settings-->Plant abroad-->Activate Plants Abroad
Tick the box with the question: Plants abroad activated
Needs activation for Company code
Financial Accounting-->Fin Act Global Settings-->Tax on Sales/Purchases-->Basic Settings-->Plant abroad-->Enter VAT Register Number for plant abroad
Enter per company code a country code which is different than the actual country where the company is established and the VAT registration number.
country in which Plant abroad (Sweden in this case) is present Details
Maintain Tax Codes
Need to complete the field "reporting country" in the properties of the new tax code. This means that you can use this tax code for the new VAT registration number/new reporting country.
IMG: Sales and Distribution-->Basic Functions-->Taxes-->Plant Abroad-->Maintain and Assign Pricing Procedure
IMG: Sales and Distribution-->Basic Functions-->Taxes-->Plant Abroad-->Maintain Billing type and billing type proposal
IMG: Sales and Distribution-->Basic Functions-->Taxes-->Plant Abroad-->Maintain Copying control
IMG: Sales and Distribution-->Basic Functions-->Taxes-->Plant Abroad-->Maintain billing relevance for Item Categories
IMG: Sales and Distribution-->Basic Functions-->Taxes-->Plant Abroad-->Assign GL account to account key
UML need to be maintained
IMG: Sales and Distribution-->Basic Functions-->Taxes-->Plant Abroad-->Maintain Declaration Numbers
Sample SAP INTRASTAT output related to Plant Abroad scenario
VAT accounting entry for Plant abroad transactions:
SAP’s solution for Plant abroad meets the VAT and INTRASTAT reporting requirements for Toll-manufacturing and statutory reporting.