1. 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 check the ESL and send the respective files to Local Accountants.

1.2. Scope

The VAT Procedure is performed for the following PF1 companies: 0212, 0274, 0276, 1196, 4056 (6289, 6290 and 6291), 4060, 4061, 5642, 5673, 5869, 6267 (5674) and 6288. 
The ESL Procedure is performed for companies 0005, 4056/6289/6290/6291, 6267, 5642, 0212, 0274, 0276, 1196, 4060, 4061, 6068, 6111 and 5835. 

2. Definitions

See Finance Glossary:

• BOIC
• BFC
  
  

3. Tasks description

3.1. Responsibilities

RtR BO (change RtR BO) will run the posting, perform the checks explained, inform RtR FO (change RtR FO) of any discrepancies found in relation with the explanation of this procedure, update the variant of transaction S_ALR_87012277, update the variant of transaction S_ALR_87012357 - Advance Return for Tax on Sales/Purchases on local request and update the SOP (change) whenever is necessary.

RtR FO (change RtR FO) must answer to discrepancies arisen by RtR BO (change RtR BO) and check the procedure outcome.

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 (change 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. VAT Procedure for PF1

Open excel file DE - VAT PF1 Template – follow Steps. 
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. Pre-Check 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 we have implement several checks related to:

• Invalid tax codes (5B, 5D and 5E),
• 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 tax codes, investigate the documents and request correction to PtP (change PtP) and/or 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 (change PtP) has to be asked to perform the correction accordingly. (Step 6 of Excel file) 

3.3.2. Creating/Posting the Batch D+4

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. Control Post-Batch D+4

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. Transfer of Tax units

Transfer amounts in VAT collection accounts from 6289/6290/6291 to 4056 andfrom 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. Posting to Vendor

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 05th of the second month after the closing month (example: VAT for July is due 5th 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. VAT account clearing

After this Check was done, proceed with the clearing of the VAT accounts (Step 14). Additionally close VAT accounts.
When this steps are done, please release to Local Accounting Department the following WF message:

"Dear all,
VAT procedure for this month was already performed.
Please note that the archive will be done, as always, after the closure.
Best Regards,
SC DACH Team"

3.3.7. Repeat VAT report for additional posting

 Step 15: If there was any new VAT posting after the posting of the batch, you will need to include this new document number in the electronic Advanced Tax return:

If FOTV was not yet processed:

Run RFSUMS once more with flag on Batch Imput for the respective CC and doc number which was posted after VAT procedure (S_ALR_87012357 /Variant 3S-DE-VAT1 but select only the company code with new document). 
The program will only generate batch input, if VAT amount in document is different than zero, if so execute SM35. 
Afterwards RFSUMS S_ALR_87012357 has to be run once more for this CC for all documents but without batch input session, because the system somehow links it to the Submission of data to Finanzamt (Fiscal authorities). 

If FOTV was already processed:

You will notice that FOTV was already processed if by following the option above you receive error message: "Company Code XXXX has already reported in this period". 

So run RFSUMS once more, with flag on Batch Input, only for the respective CC and without doc number restriction (S_ALR_87012357/Variant 3S-DE-VAT1 but select only the respective company code), and by flagging the option suggested in the error message: "Corrected Advance Tax Return". 

Once again the program will only generate batch input, if VAT amount in document is different than zero, if so execute SM35. 
After reprocessing Tax Return, assess the need of re-doing or not archiving:
If you have done it already for this company and period, you should do a new archiving with the current data available in SAP. Do as described in point 2.8, but use "– Correction" after the standard text to use in archiving. Example: 

 

For both situations: If the VAT code is different than 0, there is the need to correct also the posting on the vendor. So, reverse the posting already made previously, and post a new document with the total amount. Important Remark: The wrong documents (the first one, and the respective reversal) need to be cleared together.

3.3.8. Archiving

Step 16: For legal reasons it is necessary to archive all VAT information during 10 years.

As clarified with Klaus Henke and Imke Frank, it is not allowed to do the archiving for all companies in one single file. Therefore we opted to use the old variants used by FO. The list of variants is in the excel file.
This can and should be done after the closure, in order to workload during the closure – but in any case it is very important and should be never forgotten. 
Run transaction S_ALR_87012357
In each variant, adjust the posting period of VAT.

And only change the settings here:
The posting date, posting period and due date (VAT posted on July is due 10th of September, lag of 2 months; for December year x, then 10th February year x+1).You might need to untick – Electronic Advance tax return field. 
Remark for 4060: NL VAT (variant for NL) is set to doc type S5 to more easily identify NL postings in 4060. 
The variants for 4056, 6267 and 1424 include the companies belonging to the tax unit. This is customized in some special tables and there is no need to add them in the selection screens! 
Start transaction (F8). 

Output:

Now for archiving do the following: 

Go to Properties: 

Choose Time of Printing "Immediately".

Choose – Object Type is always: BKPF

• Document Type always: ZDF-FI_ALL
• Information: ZDF
  Please copy the text for each company and variant form the Dashboard in the Excel file (Step 16). 

 

You will receive the following message:

 

Please continue this process for all the respective companies.

3.3.9. Last Check Archive

Run OADR - Process with F8.
The short text has to be modified each month USTVA*M/YYYY*

Check if the archiving of all companies shows up there. It might take some time until it reaches OADR.

3.4. ESL Procedure For PF1 and RCS

The ESL Check has to be sent to Local Team until the 25th of each month, for the amounts of the previous month.

3.4.1. Retrieve the amounts

Run the transaction with the following variants:

Variants and contacts included in the file from M drive:
M:\PROJECTS\786 - VAT and Intrastat\DACHNLUK\Germany\ESL\History and Variants.xls    (link to the path)

• 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, SBS FtO (local team) should warn SBS BO, in order to update the variants accordingly.

• File name in the system: Update in order to save the files to your computer (eg. H:\ESL\4060).

• 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:

• • For RCS, we have to run transaction S_ALR_87012357 with variants "6111-CHECK SBS" (updating the posting month only for the closing month), and check the total amounts for the respective tax codes:

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

• If the amounts don't match, probably there was a late posting made after the VAT calculation. In this case, we should repeat the VAT procedure in order to find the late posting, and confirm if it should still be posted in the closing month, or if it will be posted only in the current one.

• We should also check in the VAT file if there are additional companies with postings using the relevant tax codes (PF1: 5G, 5Q, 61 and 62; RCS: 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. 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:

• Source File: The same as mentioned in step 5.1.
• Target File: The place where you want to save the XML file.

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

3.4.3. Exception for 4056/6289/6290/6291 (verify this section numbering) 

As companies 4056/6289/6290/6291, are the same legal entity, there is an extra step that needs to be performed:

• Copy the excel data of all companies belonging to the same legal entity into the same sheet:

• Select all information (without the totals) and create a pivot table with the following selections:

• You'll get the following table:

3.4.4. Validation of the data

• For PF1, after running transaction S_P00_07000221 for all companies, all the files (2 by company, plus the exception files for 4056/6289/6290/6291) have to be published in the Google Drive DACH folder, folder VAT ESL - Zusammenfassende Meldung, and then CAMs should be informed.

End of document