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Calin_Cernea
Advisor
Advisor

Co-authored by anthonysantoro and ovidiu-calin.cernea.

 

When SAP S/4HANA Cloud 2202 was released, we provided a fairly extensive blog post about Registration for Indirect Taxation Abroad (RITA), letting you know what RITA is, how it basically works, and how it could benefit you.

Since then, we've added to our modest "RITA library" with an OpenSAP Podcast and some additional content explaining RITA in more detail.

We've also been fortunate enough to get quite a bit of feedback regarding RITA, and we want to take this post to address some recurring questions or points that are unclear.

This post covers five topics. First, we'll talk briefly about RITA for users with a Solution Builder landscape who will be doing the activation through the Manage Your Solution app. Second, we'll show you a different way to test RITA with minimal disruption when you're adapting your tax account determinations. Third, we'll quickly address activation in the CBC landscape. Fourth, we'll talk a bit more about the specific restrictions that are in place during your RITA migration, how they're resolved, and what system behavior you can expect in subsequent migrations. And fifth, we’ll provide some information about where RITA is available and in what constellations of reporting and company code countries/regions.

    1. Activating RITA via Manage Your Solution

We want to make clear at the outset that anyone using SAP S/4HANA Cloud, public edition, can certainly activate RITA (with SAP’s support) if it suits their business needs. You would do so primarily using the Manage Your Solution app in your system.

Have a look at the following graphic, which outlines the basic value proposition of RITA in the Solution Builder and CBC system landscapes:


Now, it's clear that right now, you can do more with RITA in the CBC landscape, but you nevertheless achieve substantial functionality with RITA in the Solution Builder landscape, right from the moment you activate the feature. The principal distinction is that CBC users can create a plant in a country/region that differs from the company code country/region (point 7), which in turn enables you to operate different end-to-end process-oriented solutions orchestrated by standard business processes (point 8). These additional capabilities are only available for customers taking part in the Early Adopter Care program. (For more information, please see SAP Early Adopter Care.)

There is a way to achieve a similar outcome in the Solution Builder landscape: Let's assume you want to use RITA to run a sell from stock abroad process. On the sales order level, the country of the plant is defaulted to the tax reporting country, but this default value (tax_country) can be overwritten using the value of the tax departure country from the sales order header. This change can be made manually or using a BAdI, but you need to be aware that changing this value in the header changes the value of the tax country for all items in that sales order. This may not always be your desired outcome. This workaround lets you bypass the "foreign plant problem" and still have your relevant postings recorded correctly, that is, with a tax country that differs from the company code country. But not only is it somewhat inelegant, it also puts you in a position where you need to have this workaround tested and validated by your tax experts, to make sure you're not creating any reporting errors.  (This, obviously, is not a recommendation; it's merely a recognition of what some customers are doing.) For more information, you should have a look at the following links for the BAdIs and for an important KBA.

    1. Another Way to Test RITA During Your Activation

The customizing activities that you use to activate RITA are not transportable. There are several outcomes that follow from this. First, you need to complete the activation process in any system in which you test or develop, in sequence, and then activate in your production system once your other systems are active. This also means that you can only activate in your production system once you've thoroughly tested in your test systems.

Of note is the fact that during the activation process, tax box mapping and tax account determination activities are blocked for changes or for transport to the production system due to the enablement of the tax_country field in these settings. Veto checks run in your system and throw up blocks where needed to prevent you from creating potentially serious data inconsistencies in your systems.

We've been asked for some more clarity on what this means for users practically, so let's work through it together.

Here's the scenario: You have a company code in Germany (DE01) and you need a registration for indirect taxation in Belgium (BE).

We propose the following sequence of steps when testing and activating RITA:


 

 StepsRITA status in Q system  RITA status in P system  ActivityRestrictionsTransport possible?Additional remarks
140Test domestic processes (DE)

DE is locked for tax box mapping changes.

Do not make any tax account determination changes from this point forward.
Yes, with the exception of tax box mapping (DE).

Any changes made to your tax accounts in your Q system are lost when changes are transported to P.

 

Please be aware that BAPI and API calls to your Q may need to be adapted, because these will now contain the tax_country field, which needs to be filled.
250Activate RITA in Q  (i.e. for Company Code DE01) by creating a customer incident and asking SAP to enable RITA on your Q system; SAP must make the change from status 4 to status 5

DE is locked for tax box mapping changes.

Tax account determination is blocked for all countries.
Yes, with the exception of tax box mapping (DE) and tax account determination changes. 
355

A. create an incident a customer incident and ask SAP to enable RITA on your P system.

 

B. Run the RITA migration on your P system.

 

C. Once the RITA status in your P system is status 4, use the same incident and ask SAP to change the status from 4 to 5.
No restrictionsYes

Tax account determination is unblocked.

 

Please be aware that BAPI and API calls to your P system may need to be adapted, because these will now contain the tax_country field, which needs to be filled. This field must be filled, even if the tax country is the same as the company code country.

 

Note: It is still possible to undo RITA activation at this point via SAP Support.

 

No regression cases are currently known following the sequence (1-3) as described here.
45 (BE)5Extend (RITA BE) and test foreign business scenariosBE is locked for tax box mapping changes.Yes, with the exception of tax box mapping (BE) changes.

Tax box mappings can be maintained for Germany (DE).

 

Note: It is still possible to undo RITA activation via SAP Support

 

If you’re using specific BADIs or BAPIs that influence the tax_country value, these BADIs/BAPIs need to be tested.
55 (BE)5 (BE)Transport tax account determination settings into P; assign BE to Company Code DE01 as tax reporting countryNo restrictionsYesDE and BE are now active and RITA-enabled. In future RITA activations for these countries (additional company codes), tax box mapping restrictions are no longer relevant.


 

Breaking this down somewhat, what you see here is that initially, you want to test RITA for your domestic transactions. Once RITA is in status 4 in your test systems, you can do this, as long as you don't at this point define a tax country for that company code (save this for step 5).

How this works: In step 1, you're using the Activate RITA and Maintain Tax Registration Countries/Regions (103464) configuration activity, but you are not at this point adding any registration countries using the Maintain Foreign Country/Region Registration(s) option.

Continuing your RITA migration activities, at our step 2 here, you'll activate RITA in your Q system for domestic business. Ideally, you perform step 3 as immediately as possible following step 2, with respect to the RITA migration and activation procedure. Now that you're at step 3, you can extensively test the behavior of the tax country/region field, now that RITA is active in both your Q and P systems. Further, now that Q and P are both in sync at activation status 5, you can proceeded with any needed tax account determination and tax box mapping assignations.

And now that you've followed this sequence to reach step 3, steps 4 and 5 can proceed with minimal to no disruption. At step 4, you can use the Maintain Foreign Country/Region Registration(s) option to add foreign registrations to your company codes (in our example, adding BE as a registration to company code DE01) and you can perform all remaining needed tests, with an eye toward your international business.

2.1. Testing and Activating RITA Without a P System

So what happens if you want to test RITA but you don’t have your P system up yet? You can follow the steps below to test and activate RITA, but with one caveat: You must be extremely careful with changes that are stored in transport assignments. Making tax-related changes and then releasing those transports can cause dumps or more serious data issues when the time comes to activate your P system, and tracking down the tax-related changes to remove them from transports could interfere with changes that you want transported. So after stating that we recommend following this approach only with extreme caution, here’s how you can do it:

    1. Activate RITA (status 5) in either your Q (2SL) or T (3SL) system.

 

    1. Adapt tax box mappings or make changes to tax account determinations for testing purposes.

 

    1. Order and activate your P system.

 

    1. Release tax-related changes made before RITA activation for tax box mappings and/or tax account determinations to your new P system.

 

    1. Activate RITA (status 5) in P.

 

    1. Release changes made after the RITA activation for tax box mappings and/or tax account determinations to the P system.



 

    1. In the 3SL CBC Landscape



The activities differ between the Solution Builder and CBC landscapes, but the basic flow remains the same, so we wanted to replicate the chart above and include it as a handy reference for our CBC users:

 

 

 StepsRITA status in D systemRITA status in T system  RITA status in P system  ActivityRestrictionsTransport possible?Additional remarks
1440Test domestic processes (DE)

DE is locked for tax box mapping changes.

Do not make any tax account determination changes from this point forward.
Yes, with the exception of tax box mapping (DE).

Any changes made to your tax accounts in your Q system are lost when changes are transported to P.

 

Please be aware that BAPI and API calls to your Q may need to be adapted, because these will now contain the tax_country field, which needs to be filled.
2550Activate RITA in D and then T, in sequence(i.e. for Company Code DE01) by creating a customer incident and asking SAP to enable RITA on your D and T system; SAP must make the change from status 4 to status 5

DE is locked for tax box mapping changes.

Tax account determination is blocked for all countries.
Yes, with the exception of tax box mapping (DE) and tax account determination changes. 
3555

A. create an incident a customer incident and ask SAP to enable RITA on your P system.

 

B. Run the RITA migration on your P system.

 

C. Once the RITA status in your P system is status 4, use the same incident and ask SAP to change the status from 4 to 5.
No restrictionsYes

Tax account determination is unblocked.

 

Please be aware that BAPI and API calls to your P system may need to be adapted, because these will now contain the tax_country field, which needs to be filled. This field must be filled, even if the tax country is the same as the company code country.

 

Note: It is still possible to undo RITA activation at this point via SAP Support.

 

No regression cases are currently known following the sequence (1-3) as described here.
45 (BE)5 (BE)5Extend (RITA BE) and test foreign business scenariosBE is locked for tax box mapping changes.Yes, with the exception of tax box mapping (BE) changes.

Tax box mappings can be maintained for Germany (DE).

 

Note: It is still possible to undo RITA activation via SAP Support

 

If you’re using specific BADIs or BAPIs that influence the tax_country value, these BADIs/BAPIs need to be tested.
55 (BE)5 (BE)5 (BE)Transport tax account determination settings into P; assign BE to Company Code DE01 as tax reporting countryNo restrictionsYesDE and BE are now active and RITA-enabled. In future RITA activations for these countries (additional company codes), tax box mapping restrictions are no longer relevant.


 

As you can see, the basic flow remains the same; the key takeaway here is that you need to keep your D and T landscapes in sync at each step, and proceed to bring your P system into sync with D and T as described in this flow.

    1. Subsequent Migrations and Restrictions

So far, we've dealt with the initial migration of a company code to RITA. In subsequent migrations, in the same scenario, in step 4, you don't have the tax box mapping restrictions for Belgium. That is, once you assign a country as a foreign registration country--here, Belgium--it's no longer blocked in subsequent migrations. In fact, all RITA-active countries remain unrestricted in subsequent migrations.

Put differently, tax account determination restrictions go away completely once at least one company code is active in status 5 across all of your systems, and the tax box mapping restrictions are lifted once you have a foreign registration in both your Q and P systems.

Hopefully this clears up your questions regarding RITA activation in Solution Builder, the restrictions that accompany the various stages of RITA activation, and gives you an idea of how to activate and test with minimal disruption.

    1. Where RITA and the Foreign Plant Feature Can Be Used

We had one final goal for this post, which is to make it clear where RITA and the foreign plant feature can be used, and for which countries/regions you need to have a full activation. The table below reflects the current status as of SAP S/4HANA Cloud, public edition, 2308 edition:

No.Country/RegionRITA enabledForeign plant enabledCountry/Region activation required
(Y/N)(Y/N)*(Y/N)**
1ATAustriaYYY
2BEBelgiumYYN
3CHSwitzerlandYNY
4CZCzech RepublicYYN
5DEGermanyYYN
6DKDenmarkYNY
7ESSpainYYY
8FIFinlandYNY
9FRFranceYYY
10HUHungaryYNY
11IEIrelandYNY
12ITItalyYYY
13KRSouth KoreaNYY
14LXLuxembourgYNY
15MXMexicoNYY
16MYMalaysiaYNY
17NLNetherlandsYYY
18NONorwayYNY
19NONorwayYNY
20RORomaniaYNY
21SESwedenYYN
22SGSingaporeNYY
23SKSlovakiaYNY
24TWTaiwanNYY
25UKUnited KingdomYYY
26ZASouth AfricaYYN


* (One special case is currently available to selected pilot users, which allows them to create a foreign plant in a non-standard country/region using the “customer localization toolkit” (CLT) technique. At this point in the piloting, this case currently permits you to create a foreign plant for Uruguay with Mexico as the reference country.)

Remember, though, that the foreign plant feature currently is only available for early adopter users on the CBC landscape. If you’re interested in potentially joining the early adoption program, here’s that link again, so you can find more information about early adoption for RITA.


** For countries where RITA is enabled and does not need full country/region activation, we’ve made specific scope items available. These scope items allow you to manage tax content, including Intrastat reporting (for EU countries) and local compliance reporting. These are global scope items to be activated for a country/region solution where a company code is used when RITA is activated. Here’s an overview of these scope items:

Country/RegionScope Item for VAT tax calculation and reportingScope Item for Intrastat ProcessingScope Item for Compliance Formats - Support Preparation
BEBelgium5IS5PA5P9
CZCzech Republic5Z25Z45Z7
DEGermany55U5OL5O6
SESweden5Z15Z35Z6
ZASouth Africa5Z0Not in scope5Z5


 

Information on these country-/region-specific scope items, including any restrictions on their use, can be found in SAP note 2907372.

 

5RP is a non-standard scope item and is only available in the CBC landscape, so it can only be activated when we (SAP) have an incident from you requesting activation.


And we know that the country/region matrices shown above mean you need to pay close attention when you’re activating these specific scope items. We’re working toward a simplified approach that will simplify your activations. Keep an eye on our roadmap explorer and What’s New content, so you can stay informed about these improvements as we roll them out.

 

Your Voice Matters!

If you want to learn more and actively engage with SAP subject matter experts on SAP S/4HANA Cloud, join our SAP S/4HANA Cloud Community – now fully integrated with SAP Community. The community brings together SAP S/4HANA Cloud customers, partners and SAP experts and has a clear mission: deliver an interactive community to engage with one another about best practices and product solutions. We invite you to explore the new SAP S/4HANA Cloud Community ‘one-stop shop’ as the central place for all resources, tools, content questions, answers and connect with experts to guide you through your SAP S/4HANA Cloud journey.

 

For more information on RITA for SAP S/4HANA Cloud, public edition, check out the following links: 

    • SAP S/4HANA Cloud Blog: RITA
    • SAP Note 2907372 details restrictions on RITA
    • Early Adopter Care Program for RITA * :  EAC for SAP CBC customers

 

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