1. Objective and Scope

1.1. Objective of this Operation

This document is to be used as a step-by-step guideline to facilitate the VAT reporting by SBS of the operations made by Solvay entities in Portugal. 
It describes the compliance process for the preparation of the VAT Return / Declaração Periódica, ESL / Declaração Recapitulativa and Annual Return (VAT and Annexes O and P) / Declaração Anual – IES (IVA e Anexos O e P). 

It also includes in the appendixes for your information: 

• The list of tax codes for Portugal
• The included Visio overviews per return process in landscape.

For any general questions with respect to the Portuguese VAT compliance requirements, please refer to the general VAT compliance manual for Portugal. 
This manual is subject to be amended to reflect the legislative changes and the IT/system optimizations that may be implemented in the future.

1.2. Scope

The entities for which SBS will be responsible for the preparation of the VAT and Intrastat compliance in Portugal are listed below:

2. Definitions

See Finance Glossary:

• ESL
• Intrastat

3. Tasks description

This section explain the process of:

• Preparation of VAT reports in SAP;
• How to extract those reports;
• Were to include them in excel file for preparation of VAT Return and ESL reports;

• Quality and Congruence checks necessary to ensure good reporting.

3.1. Periodicity

The VAT reporting obligations in scope for Portugal are the following:

• VAT Return / Declaração Periódica
• ESL / Declaração Recapitulativa
• Annual Return (VAT and Annexes O and P) / IES ("Informação Empresarial Simplificada")
• Intrastat (arrivals and dispatches) returns are currently prepared by VAT & Indirect Tax Team (explained in another procedure)

Below the deadlines for each obligation:

3.2. I pre-check VAT codes

Periodicity: Monthly

• VAT & Indirect Tax Team will run the report S_ALR_87012357, to check if there are VAT postings on codes that are no longer used in the PT companies.
• SBS - Procurement based on the output from VAT & Indirect Tax Team will correct the errors with the VAT codes 

These checks must be done twice a month: 

1. Check should be done at D+1 at evening 
2. Check should be done at D+2 at noon 

For checking Advance return for tax on sales / Purchase with old vat codes no longer used in PT, VAT & Indirect Tax Team will run transaction S_ALR_87012357:

Choose variant: 3S BLOCKED VAT (includes Cod 5960)

Posting date: 01.MM.YYYY to 31.M+1.YYYY (last two months)

Tax on sales/purchases code (already included in the variant)

Click on execute 

After executing, VAT & Indirect Tax Team will obtain a list of posting with old vat codes no longer used in PT. 

Go to the end and on the balance column should be no amount for the period you are analyzing. 

After finding the document with the wrong tax code, you need to create a case to Procurement Team in order for them to correct it. This document needs to be corrected in the respective month. 
After correction the balance must be zero. 

3.3. I prepare the VAT Return Template / Quality Check

The file PT VAT Return Template helps to do a congruence check to the information that comes from SAP. It is needed so we can compare the reports that will be extracted in SAP and are showed in IVA Program (Quadro6 and Quadro 6A) with this template in Excel, and if there is any problem we can easily understand what is wrong.

1. Open the Template File (there is one file for all the year, a new file is only required when it is a new year). If it is a clear file, select the Year and the Company desired.
2. Select the month which we are reporting.
3. To extract the information go to S_ALR_87012357, and select the variant depending on the company use (CCCC stands for company code): VAT_CCCC_CHECK (for company 5960 will be VAT_5960_CHECK)

Example:

Extract the Information to a XLS.

1) Import the table to Sheet "SAP DATA_MMM" beginning in cell J5

2) The report will calculate the VAT automatically by formula

3) Go to sheet "Report_MMM" and insert in:

6a. Check on FS10N - account 2411000000 / 2451000000 - insert balance carried forward, or the amount that was transferred into account 2451000000 "Transf to VAT payable" in cell I41. 

6b. Check on FS10N the amount on column "Cum. Balance" of the reporting month in account 2411000000 / 2451000000 - If we have VAT to Receive/Pay - and insert the amount in cell I49.

4) Go to sheet "CHECK" and see if there is any difference:

7a. In "VAT Codes check" , you need to see if there is any VAT Code that shouldn't be use in the company we are reporting. See Annex. 

7b. In "Check_SAP_DATA" , you need to analyse in sheet SAP_DATA_MMM to check what is the VAT code or related that isn't being well retrieved from the formulas. 

7c. In "Final_Check" if there is any difference, it may be related to the 2 checks above, or VAT was paid in that month.

5) This Template will be used to compare with the reports extracted from SAP that are submitted in the Website.

6) In "SAP DATA_MMM" please insert print screen from transaction S_ALR_87012357 and S_P00_07000221.

3.4. I prepare the ESL / Declaração Recapitulativa

3.4.1. I run SAP ledgers

Step by step process

Run the transaction S_P00_07000221 after selecting the appropriate variant "CCCC" ("5960" for Solvay Shared Services) and the appropriate reporting period (closing month). 

In the field "File name in the system" enter the name under which you wish to save the file that will be generated. Please save this in H.

In  is indicated the Tax ID of the accountant and selected "first periodic declaration":

Make a "print screen" of the outcome of this transaction. Insert in sheet "SAP DATA_MMM" of PT VAT Return Template for the company.

Run the second transaction S_ALR_87012401 after selecting the appropriate variant by company code (select *CCCC*, where CCCC is the company code) and the appropriate reporting period. Note that this can only be done once the first transaction is completed and you have to exit.

The field "Source file" and "Target file" have to be saved in H and under the following structure: entity_Type of return_year_month

In the field "Source file" enter the name of the file that was created with the 1st transaction.

In the field "Target file" enter the drive where the generated file will be saved as well as the name of the file.

3.4.2. I prepare the draft return

Go to the offline program installed in your Desktop, called Declaração Recapitulativa.

Select  (=open) the file, in this case PT-5960.XML which is in H.

Save the file by clicking Ficheiro / Gravar como in the respective folder (e.g. 2010 / IVA DECLARAÇÕES) and name the new file (e.g. IOX_IVA RECAP_07 2010)

Click  to confirm that the system does not show any errors

By the end of the process, please click  to save the file. Please note that once you click on "Gravar", the open return (with the changes inserted) will become the latter version and will automatically replace the last file.

3.4.3. I perform quality checks

Total amount per client should be reported without any decimals and should not be negative. In case of negative total amount, please remove this amount from the ESL / Declaração Recapitulativa and from box 7 of the VAT return / Declaração Periódica. The reason is that the total of the ESL return / Declaração Recapitulativa should be exactly the same as box 7 of the VAT return / Declaração Periódica. Please also make a comment in the review package.

Verify that all data are correct by comparing the information of the Program with SAP report S_P00_07000221 in Point 3.4.1. 

Compare the Total amount in the Program "Decl. Recap." with the amount in PT VAT Return Template, sheet "Report_MMM" in field 7 (Cell G8), the amount must be the same.

3.4.4. I finalize - preparation for submission

Create as per above the file to be uploaded on the website of the Portuguese tax authorities and check whether modifications are necessary.

Examples of modifications required are:

• Missing VAT numbers: in this case, check the underlying invoices and complete the missing information;

• VAT number is from a Portuguese customer: as this listing relates to European transactions, this is not correct and the system will detect this as an error. In this case, check the underlying invoices. If it appears that a sale to a Portuguese customer was wrongfully included as an EU sales of goods / services, please amend the posting. Note that this amendment will also have an impact on the VAT return / Declaração Periódica and probably on the Intrastat reporting.

Finalize the ESL / Declaração Recapitulativa review package, i.e. the draft ESL return / Declaração Recapitulativa, the agreed reconciliation, the print screen of the outcome of the SAP transaction, the list of adjustments and the list of issues (if any). The review package should be sent to CAM for review.

• If something needs to be changed, the package will be returned to SBS back office VAT & Indirect Tax Team for reworking.
• If no changes are necessary, the review package will submitted by Solvay contact person in Portugal.
• If the Solvay local contact person approves the draft ESL return / Declaração Recapitulativa, he / she will proceed with the submission of the return.

Follow up with the Solvay local contact person to confirm receipt of the package and get back a copy of the submitted ESL return/ Declaração Recapitulativa for archiving. 
The ESL / Declaração Recapitulativa return submission will be done in Portugal by the Solvay local contact person.

3.5. I prepare the VAT Return / Declaração Periódica

For the creation of the file to submit in the Portuguese authorities' website follow the steps bellow on a monthly basis.

3.5.1. I run SAP ledgers

Run transaction S_ALR_87012386; enter the variant per entity, the appropriate release date to determine the reporting period, message type must be "Monthly Return" and the File Name – Local where to save the file. Press to choose the variant.

The Variants for the Transaction are divided by company:  "CCCC - VAT MON", where CCCC stands for the company code.

Specific Remark:
Transaction S_ALR_87012386, after selecting the variant and before running the report, insert on field "Exceeding To Be Reported" the amount of field 61.
To retrieve the amount of Field 61, go to transaction FS10N, select account 2411000000 and company code, and copy the balance carried forward amount of previous period.
Company 0005 never has balance carried forward, so we don't insert. 5960 always has, and the others have sometimes.

Example:

Check that the options:

• "Activities with Fixed Ass", "VAT Sys. Intra Com Transa" , "Operation Ref to Art. 3" and "Operation Ref to Art. 3 (App)" are selected when it's necessary.

Run the report pressing  . (For SCI because there is more than 1 company it gives a warning, please continue)

The output return shows the tax base amount and tax amount for each tax code and grouped by field in the declaration.

The file has been now generated successfully to folder "H:\vat" (default, this can be changed if you want).

3.5.2. I prepare the draft return

After running the transaction S_ALR_87012386

Go to the offline application on your Computer called IVA.

Select  and choose the file previous created:

Click 

In  it appears the VAT identification number and when the VAT return / Declaração Periódica is submitted within the legal deadline ("dentro do prazo")

In  it shows the year and the month that the VAT refers:

In  it indicates the localization ("Continente")

In  the option indicates if in the period in question the entity filed an ESL / Declaração Recapitulativa.

In  Normally this does not have to be filled in. 

In  shows the amounts of the VAT return / Declaração Periódica by field.

In  shows the amounts of the VAT return / Declaração Periódica.

Click  to confirm that the system does not show any errors:

Click  to save the file. Please note that once you click on Gravar, the open return (with the changes inserted) will become the latter version and will replace the last file.

If necessary select  to print the draft return and make sure everything is okay.

3.6. I prepare the Annual VAT Return

3.6.1. I prepare Annexes O and P

Run transaction S_P9C_18000044, enter the variants mentioned below, per entity, and select the appropriate posting date to determine the reporting period.

• Annex O is the report for Customers
• Annex P is the report for Vendors

Press  to choose the variant. 

There are five possible variants depending on the entity 

• PT-6414 for reporting entity 6414 SOLVAY BIOTECNOLOGIA PORTUGAL - UNIPESSOAL, LDA,
• PT-6424  for reporting entity 6424 SLV SPECIALTIES PORTUGAL, UNIPESSOAL, LIMITADA

For example, choose PT-6387, select "Report Customer Sales" only for Customer:

For Vendors Select "Report Vendor Sales" only.

Extract both files to XLS. 

Prepare for both Reports a XLS like the following example

3.6.2. I prepare Annex L

Run transaction S_ALR_87012386, enter the variant PT_CCCC per entity (CCCC stands for company code), the appropriate release date to determine the reporting period, message type must be "Annual Return" and the File Name – Local where to save the file.

Press  to choose the variant.

For example, for company 6387, choose PT-6387:

Run the report pressing F9 (Background Processing).

Click "Immediate" and  .

The output return shows the tax base amount and tax amount for each tax code and grouped by field in the declaration. 

Go to SM37, and then go to Spool of job  . Extract the information to XLS.

To save the file in the computer go to S_ALR_87012401.
Press  to choose the variant PT-5960ANNUAL, then update with the data from the company code you are working.

Run the report pressing  . The file will be created in H:\

3.6.3. I send the files

The final step for the Annual VAT Return (Annexes L, O and P), is to send to CAM & Accounting Platform the files and the information. 

You need to send the XML of Annex L, and the O and P XLS files.

CAM & Accounting Platform will submit the IES/Annual Vat Return.

3.6.4. I perform quality checks / notes

• Check that the inter-companies flows are correct, for example: sales from Solvay entity A to B should equal purchases from Solvay entity B to A. In case of differences, please inform CAM.

• The annual VAT return summarizes all figures reported in the monthly VAT returns / Declaração Periódica. Reconcile the amounts reported in the periodical VAT returns / Declaração Periódica with the year-end amounts to be reported in the annual VAT return. There should be no differences between the VAT positions of the periodical VAT returns / Declaração Periódica and the final result of the annual VAT return. The following template can be used for the preparation of the annual VAT return: PT VAT Return Template.

• No corrections can be made in the annual VAT return. Any corrections required need to be made in the related periodical VAT returns / Declaração Periódica.

• Manual additions need to be made to Annex L to include specific transactions such as exempt supplies or nondeductible purchases - to be completed in the annual declaration.

• Follow up with the CAM to confirm receipt of the package and get back a copy of the submitted Annual VAT return for archiving.

The Annual VAT return submission will in principle be done in Portugal by the Solvay local contact person.

End of document.