. Objective and Scope

1.1. Objective of this Operation

The purpose of this document has 2 objectives:

• Explain how to post VAT payable and deductible and how to check its accuracy;
• Explain how to prepare the ESL.

1.2. Scope

The VAT Procedure is performed for PF1 company 5642. 
The ESL Procedure is performed for companies 5835 and 7772. 

2. Definitions

See Finance Glossary:

• BFC
• BOIC
• CAM
• ESL
• GL
• PF1

3. Tasks description

3.1. Responsibilities

VAT Service Unit (VAT SU) will run the posting, perform the checks explained, update the variant of transaction S_ALR_87012357 - Advance Return for Tax on Sales/Purchases, if needed, as well as update the SOP whenever is necessary.

3.2. Periodicity

The operation explained in this procedure must be done, on a monthly basis for all companies mentioned in point 1.2 with the exception of 5673, which is only done in a yearly basis. During Annual closure it is posted in closing period, after the Last CROCO invoice has been posted and before the data is sent to BOIC/BFC. Outside Annual closure it is performed right after the closure has finished with posting date current month. The pre-check must be performed every month in the closure on D+1, in order to correct wrongly used tax codes.

3.3. I perform the VAT procedure for PF1

For your information note that the structure of VAT accounts is the following:

• Accounts 245* are used to register the payable VAT
• Accounts 241* are used to register the receivable VAT
• The digit number six ( for example 2451030039 ) identifies the nature of the VAT:
  • 2- Intercommunity VAT;
  • 3- Internal VAT;
  • 4- Balance of the Monthly VAT.
• The last three digits identify the Country of the Fiscal Authorities to who should be paid or collected back (for example: for account 2451030039, the 039 identifies Italy).

3.3.1. I pre-check on D+1

D+1: Proceed Controls only (Step 1-7 in Excel file)
D+4 for non-yearly closure and D+2 morning for Yearly closure: Proceed Controls and the rest of the procedure. 

Explanation: 
In step 6 of the excel file we have implement several checks related to:

• Tax code 7P, that in SAP can assume free percentage but according to DE rules the tax cannot be higher than 19%
• Tax code 7H, which is no tax procedure, could not have postings in VAT accounts
• Verify that all tax codes used are valid according to list that is updated once a year in the beginning of the year, according to link below in sheet Master data Column D: (http://europe.solvay.com/de/solvay_gmbh_finance/umsatzsteuern.htm).
• Check on matching of the amounts in Transaction S_ALR_87012277- G/L account balances with S_ALR_87012357- Advanced return for tax on sales and purchases.

In case of having invalid/incorrect tax codes, we request correction to PtP using the existing shared drive for tax code correction purposes, and, in case of additional clarifications, we will contact local accountant (Imke Frank - DE-Tax-Department). 

The check on Tax code 7P is to see if there was no tax rate above 19% used (values below 1000€ accepted). If there is a tax rate above 19% used, please check the document and see if this rate is verified, by taking a look on the attachments of the posting and ask, if needed for correction. 
In case of invalid tax code detected Step 6 "Check - Valid tax codes in every company": Use Transaction S_ALR_87012359 to find the documents using this tax code, by selecting CC, Tax code and the period. Afterwards send an E-Mail to Imke Frank (DE-Tax-Department) to check, if this codes are valid and if not which codes should be used. In the End PtP has to be asked to perform the correction accordingly. (Step 6 of Excel file) 

3.3.2. I create/post the batch on D+5

This time we are actually creating the batch input session which will allow the Transfer of all VAT postings to the VAT collection account. This step is done once for all Companies and another time for 4060 with Netherlands VAT, except for December where we still should include 5673 which has annual VAT submission.
Follow the instructions in the excel file to create the batch input session.
Run the transaction S_ALR_87012357 - Advance Return for Tax on Sales/Purchases 
Choose the variant indicated in the excel file and follow dates parametrization described (Step 8). 

 

Posting of the batch: (Step 9)
In this step we process the batch inputs generated: 

This Batch inputs will centralized the VAT amounts in VAT centralized account:

3.3.3. I control the post-batch on D+5

Described in the excel file (Step 10). The objective is to assure that the posting of the batch was done correctly, that is, the amounts open in closing period for VAT account will be transferred to VAT centralized account in current month.
Example in closing month of April the VAT accounts had a total balance of 149.725,21, so this amount in May will be transferred to VAT centralized account, when we run the Batch input in step above: 

So we need now to check that in May the value of VAT centralized account is equal to the balance of non-centralized VAT accounts in April. 

To do the check for all companies follow the step 10 in the Excel file.

3.3.4. I transfer tax units

Transfer amounts in VAT collection accounts from 6289/6290/6291 to 4056 and from 5674 to 6267 respectively – by using transaction "Z1F_GLTR" (Step 11).

There is an amount to be transferred from companies 6289/6290/6291 to 4056 and 5674 to 6267. In this case 57.295,60 of VAT will be transferred from accounts of company 6289 to 4056. See at the bottom of the report. Run transaction "Z1F_GLTR" (done for 5674 and 6289/6290/6291) by using variant "USTVA TRANSFER". 
Make a check in test run to confirm values to be allocated and then run it in real: 

After confirming values run in real as described in Step 11 and process BI. 

Changes in document header text: 

In order to avoid Intercompany differences, after run BI, it is necessary to change the reference in document posted. 
For example, 4056 document invoicing to 6289 - In 4056 document please insert 6289XXXXXXXXXX, in 6289 document please insert 4056XXXXXXXXXX.

• In SM35, check the documents number in LOG, for example document number 1010000011 in 6289.

• Check the correspondent document in 4056, in this case 1010001670.

• Go to FB02 and change the document header text of companies 4056 and 6289:

In document 1010000011 in 6289, we need to insert in document header text 40561010001670; In side of 4056 is the opposite, 62891010000011.

3.3.5. I perform the posting to vendor on D+1 (M+2)

By following this step (Step 12-14) all VAT postings on collection account will be balanced in current Month after the posting on Vendor account (Finanzamt Hannover Nord 9901000217) for most companies, and for 4060 it is spitted between Finanzamt Hannover Nord 9901000217 and Belastingdienst in NL 9901000506, the Central Bank indicator will be asked while uploading the file in ZZF_POSTING_FILE. Click on more data and insert 810 in SCI). 

If balance is an amount to receive, the automatic posting file for the posting on the Vendor account has payment block A, an amount to pay is to be posted without payment block A. Due date is 10th of the second month after the closing month (example: VAT for July is due 10th of September). 

An upload file will be automatically created in the excel file. It consists in the posting to balance 2411040000 against Finanzamt. 

 

Go to the sheet "Posting" and save the excel file. Close the file and run ZZF_POSTING_FILE and post it. 

Yearly check: Control of posting to Vendor account - no amounts in VAT collection accounts:

Last Check: ALL VAT accounts with balance 0 for all, from period 1 until current Month - This is only the case in December, as we post to Vendor in the next month. 

Reversal of VAT Calculation:
In order to reverse the VAT Calculation posting, it is not possible to reverse directly the document in FB41. The reversal document will have to be posted manually using opposite posting keys from the original one.

3.3.6. I clear the VAT account

After this Check was done, proceed with the clearing of the VAT accounts (Step 14). 

3.3.7. I archive all VAT information

We archive all the VAT documentation in the team Google drive and share, on a monthly basis, a Gift Box with the CAM of each company https://drive.google.com/drive/folders/1twYlbudhHxGxPm5TxBf30n2SSNYB_9YC.

Please find below an example sent to the CAM of  company 4056.

3.4. I perform the ESL procedure for PF1 and WP1

The ESL must be submitted until the 25th of each month, for the amounts of the previous month.

3.4.1. I retrieve the amounts

Run the transaction with the following variants:

Transaction S_P00_07000221

• Before executing, adjust the following parameters:

• Reporting Period: Closing month;

• Output Tax Code: are already covered by the variants. When there are new tax codes relevant for the ESL were created, VAT SU should update the variants accordingly.

• File name in the system: Update in order to save the files to your computer. 

• The outcome will look like this:

• Add the tax code and sum by tax code.

• Make sure that the totals of the SAP transaction match with the totals of intra-community supplies in the VAT for the respective period:

• • For PF1, we can check this in the excel file, making sure that the amounts in the excel should be exactly the same as the ones in SAP, but with the opposite sign:

• If the amounts match, save an Excel of the data.

• After the above mentioned analysis, we need to ensure that all the VAT numbers extracted are valid. In Germany, this validation must be made on the following website https://evatr.bff-online.de/eVatR/index_html#Einfach_Ergebnis and validation proofs must be stored for compliance purposes. In order to assist in this legal check, the robot every month validates each VAT number and automatically stores each validation in the following folder https://drive.google.com/drive/folders/1pJz5j1imIK7xAWvfYGLTZqMrhaMFSNh_.

• The robot output is a XML file that contains a code of three digits and each has associated a specific meaning. The encoding can be found in the following link: https://evatr.bff-online.de/eVatR/xmlrpc/codes. For example, the code 200 means that the VAT number is valid.

• We should also check in the VAT file if there are additional companies with postings using the relevant tax codes (PF1: 5G and 61; WP1: 1L and 7U) that didn't appear in the ESL Report. If so, it needs to be analyzed why there are different amounts in VAT and ESL for those companies.

3.4.2. I create the files to upload

• After selecting Green Back option  , you retrieve the screen below. To create the file to be uploaded on the website of the German tax authorities, first of all, double click on the last line on the below screen.

• In the next screen we need to choose again the same variants described above, and update the following fields:

• Target File: The place where you want to save the XML file.

• Execute and then you'll get the following screen:

End of document