Use SAP Acquisition Tax Accrual to Meet VAT Declaration Requirements
- by Kees van Westerop, Senior SAP Consultant, Kwest Consulting
- December 6, 2011
In a few European Union (EU) countries, companies receiving goods without an invoice receipt must make an acquisition tax accrual and include it in a value-added tax (VAT) declaration to be able to comply with legal reporting requirements. The goods must have been shipped from other EU countries. Discover how SAP’s acquisition tax accrual functionality expedites this process.
Standard value-added tax (VAT) reporting is based on VAT postings (i.e., postings that have posting lines with a VAT code). In some countries it is legally required to report transactions for which no VAT has been posted yet. SAP developed functionality called acquisition tax accrual to meet this requirement.
Almost all sales and purchase activities within the European Union (EU) are relevant for value-added tax (VAT). VAT reporting is based on postings made for invoices sent and for invoices received. However, in some EU countries VAT also has to be reported even if no invoice has been received yet. This obligation exists when goods are acquired from vendors located in other EU countries and when the invoice still has to be received by the 15th of the month after the goods were received. For example, a Polish company orders goods from an Italian supplier. The goods are received in September, but the invoice only arrives at the beginning of November. In such a situation an acquisition tax accrual has to be made and it has to be included in the October VAT declaration. When the invoice is received, the accrual has to be reversed.
The functionality developed by SAP to handle this legal requirement is called acquisition tax accrual. The functionality is generally available since SAP R/3 4.6C. The tax accrual has to be made for the Czech Republic, Hungary, Poland, and Slovakia. I describe how to set up the acquisition tax accrual in the SAP system and the processes related to acquisition tax accruals.
For the acquisition tax accrual functionality to work correctly, you need to fulfill some prerequisites. I have listed these prerequisites and the steps that you need to take to fulfill them
Step 1. Define the acquisition tax code. First, you must set up the acquisition VAT code using transaction FTXP. This code is standard customizing, and therefore I do not describe this step further. Enter the country code for which you want to maintain the tax code. On the next screen, enter the tax code to be maintained. Press Enter to bring up the screen in Figure 1. The example shows the acquisition tax code PJ as it has been set up for Poland. The properties of the tax code must be maintained correctly. The EU code of the VAT code must have been set to 9 to indicate that it is an acquisition tax code. Figure 2 shows the properties of the VAT code.
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