Skip to Content

Like any other country China has its own tax system. In China for standard business scenario, Business require to register each and every invoice to Chinese legal system. This system is called as Golden tax system.

I find there are very less information available on this in English language .

Here I am trying to share my experience, hope it will be helpful to community.

If you find this document helpful then please do not forget to LIKE this document . Please give your rating.

Introduction:


Golden Tax System is a system developed by the China Tax Bureau (CTB) to register and pay VAT.

Without Golden Tax System a company cannot issue or print special VAT invoices. Without this company will not able to verify input VAT invoices and would not be able to submit VAT returns.

GTS was originally implemented to combat VAT fraud and invoice counterfeiting since the invoices issued and verified from the central system have unique identifier codes.

As per legal requirements, companies registered in China can issue VAT invoices only using the government owned Golden Tax System (GTS), which issues GT numbers for the VAT invoices sent to it.


SAP Golden Interface:


Capture.PNG


Golden Tax System : Process


  • The process is to send all the required list of invoices to be sent to government owned Golden Tax System.
  • The data received by GTS will be validated by Chinese Government officials and once it is done, an official invoice numbers will be issued by GTS against all the successfully validated invoices. As of now, this process of downloading Invoice list from SAP system and uploading the same into GTS system is done through a Third-Party Software. However, now this functionality becomes one of the new business functions in Version SAP ECC 6.0.
  • This function helps the Chinese suppliers (who are using SAP for their business) to manage their Invoicing functionality.
  • Golden Tax system is not available by default in ECC. We need to activate / enable the Business Function – FIN_LOC_CI_1 using transaction code – SFW5 in ECC6.0.


  • GTS configuration is FI, SD integration area. This will require FI consultant help to do FI settings.

Business Function Activation:


After activation of Business Function, you will find three new nodes available under Country Specific Function for China in SAP Easy Access Screen as shown in the below screenshot.


Capture.PNG


  • Creation of Outbound File for GTS Interface (China) from SAP (T Code GT_ULN):

•This report enables to send invoice list details to the GTS for invoice number creation or cancellations.

  • Upload of Inbound File from GTS Interface (China) to SAP (T Code GT_DLN):

•This report enables to retrieve invoice numbers that are issued by the GTS after validation of received Invoice lists.

We use SAP to create VAT Invoice, and these data must transfer to GTS to print the real invoice and send them to the customer. And in GTS each invoice has its own  GTS invoice Number. so sometimes we need to send these info back to SAP.

Therefore we have 3 Steps in SAP:

  1. Generate outbound file to GTS,
  2. Upload inbound file from GTS
  3. Check VAT invoice list.


Processing Steps:

  • Create invoice following the standard procedure.
  • Go to Transaction – GT_ULN (Creation of Outbound File for GTS Interface (China) report) and create the file with invoice lists that can be sent to GTS interface for invoice number creation. This file will be stored in the specified directory in local computer.
  • Then upload this file from the local computer to GTS (separate system) by logging into GTS and you can also perform the following process:

     •Generate VAT invoice numbers and other details for the invoices included in the file.

     • Print the invoices.

     •Create an inbound file to transfer the invoice details from GTS to SAP system.

  • Upload the inbound file from GTS into the SAP system.

  Using Transaction Code GT_DLN, we can upload the invoice details received from GTS into SAP system.


Configuration Settings:


  • Configuration path:Sales and Distribution ->Billing -> Billing Documents ->Country-specific Features -> Country-Specific Features for China

Capture.PNG


Define GTI Tax Invoice Keys:

•The maximum total amount of an invoice included in the outbound file. When the total amount of an invoice exceeds this value, the SAP system splits the invoice.

•The maximum number of line items in an invoice included in the outbound file. When the total number of line items exceeds this value, the Creation of Outbound File for Golden Tax Interface (China) report splits the invoice so that the invoice contains the fixed number of line items.

The default unit price mode, either with tax (full price) or without (tax-free price), in the outbound file.


Define Invoice Types:

In this Customizing activity, you make settings that enable the system to generate separate outbound files for requesting the following data from the tax authorities in China:

Special VAT invoice numbers

Normal VAT invoice numbers

According to tax laws in China, the VAT payable for general taxpayers and small-scale taxpayers has to be calculated differently.

  Activities

If you create normal VAT invoices for specific customers, enter the customer numbers and assign the VAT invoice type as small-scale taxpayer.


Assign Goods Tax Catalogs to Tax Codes:

In this Customizing activity, you make the settings that determine which goods tax catalog code the system enters for each business transaction record when you use the Creation of Outbound File for Golden Tax Interface (China) report.


Activities :

  To define a goods tax catalog code, proceed as follows:

• Create a goods tax catalog code for each of your business transactions to be reported to Golden Tax System.

• Enter a tax code for each of your goods tax catalog codes.

The system defaults to check if the goods tax catalog code is specific to a material number. You can specify the goods tax catalog for a material when the transaction record uses a certain tax code.


Capture.PNG


Specify Unit of Measure for Merging Billing Amounts:

In this Customizing activity, you specify which unit of measure (UoM) the system uses to calculate total amounts when billing items are merged to create the outbound files generated by the Creation of Outbound File for Golden Tax Interface report. This merge is dependent on materials and material types.

Report generation steps:

  1. Generate outbound file to GTS  (T Code: GT_ULN) :

Key in Sales area, billing document number, VAT condition type are provided by the SD team, provide a path to save the text file that will be generated, Tax invoice key information is provided by the FI team.

The selection parameters can also be saved as a variant for future use.


Capture.PNG


The following screen appears, select the row and click on “Send to GTS”


Capture.PNG

The following message appears at the bottom of the screen


Capture.PNG


At the location specified a text file is generated


Capture.PNG


Above text file is uploaded in the Golden Tax System and generates invoice which is sent to the customer against which customer makes the payment .


2: Upload inbound file from GTS (T Code: GT_DLN) :


3. Check VAT invoice list (T Code: GT_IVL)


Appendix 1: Tax Bureau system ( This will require local FI consultant)


FI User needs to login to Chinese Tax bureau site and upload file generated from SAP.


Capture.PNG




Pre-printed GTS form for printing Invoice :

Capture.PNG



Reference:


To report this post you need to login first.

7 Comments

You must be Logged on to comment or reply to a post.

  1. Krish Gopalan

    Neeraj,

    Great article. I have few questions.

     

    Do you know if the GTI Invoice tax key definition supports combining Positive and negative invoices ? I see that option as part of the config guide in 1868902 note (but SAP indicates that this note is applicable only for NWBC).

     

    Also, Did you encounter lot of custom requirements in your landscape and how did you handle them?

     

    regards

    Krish

    (0) 
    1. Neeraj Lal Post author

      Hi Krish,

       

      Thanks..

       

      No, we are not combining positive and negative invoice in our business scenario.

       

      We followed as close as to standard sap settings. I would suggest to take help of Local chinese FI consultant.

       

      Regads

       

      Neeraj

      (0) 
  2. Sridhar Bolisetti

    Hi Neeraj,

     

    It’s a nice explanation on this critical piece of localization for China.

     

    I have one doubt.  Business Function to be activated is FIN_LOC_CI_1 or FIN_LOC_CI_26.  Because in your blog above, it is specifying FIN_LOC_CI_1 whereas in the reference link you provided it is mentioned as FIN_LOC_CI_26 which has a pre-requisite Business Function of FIN_LOC_CI_9.  So, it means FIN_LOC_CI_1, FIN_LOC_CI_9 and FIN_LOC_CI_26 all these three need to be activated if they are not currently.  Sorry if I am asking a dumb question as I am not from OTC.

     

    Thanks

     

    Regards,

    Sridhar

    (0) 
  3. Guy Zieseniss

    Hi Neeraj,

    Nice article, Thanks.

    We are looking at this functionality for our recently implemented China entities.

    I haven’t read any of the config documentation yet and was wondering if this functionality is only possible for SD billing documents or can this handle FI-only invoices?

     

     

    Thanks,

    GuyZed.

    (0) 

Leave a Reply