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SAP Central Finance – Central Tax Reporting

This Blog is application for those who are working on implementation/Support of Central finance project. Latest Release available is SAP S/4HANA 1909 FPS2

When you plan to implement Central Finance, it is important to consider the end state or if the end state is not foreseen (in some circumstances) consider the medium term state of how tax reporting will be carried over.

When the accounting documents are replicated the tax information is also part of the data set, in this case when only replication is the scope then tax reporting can be carried from the source system as that’s the system for transactions and actual business system but when the Central Payment is activated it is evident that some tax postings are carried in Central system (by company code) then it is necessary that central tax reporting should be done from central system.

Before the data is even loaded it is important to activate the key checks available so that the existing open items are verified. Checks are:

  • Tax configuration consistency check

Architecture (see below)

credit%20-%20SAP

credit – SAP

Also check SAP note – 2494127

     Please read this BLOG to see what is checked in the consistency check report

  • Tax recalculation check – System makes a comparison in the tax posting values in source system and the replicated documents in CFIN systems and if there are differences exceeding the threshold, then document is visible in AIF as error message and needs to be corrected before reprocessing. To activate the tax checks for centralized tax reporting in the Central Finance system, activation for the relevant source system + company code needs to be done in the Central Finance via CFINIMG > General Settings > Activate VAT Configuration check for company codes. Also important to note that VAT configuration check is system mandatory for the company codes for which the Central Payments is active.

Limitations

  • SAP Central finance (as of now) does not support Official Document Numbering (ODN) functionality, which is mandatory for some countries from legal reporting purposes. For such countries, central finance system should not be used as a tax reporting system.
  • Tax information is not carried to CFIN system for the data loaded as part of initial load and tax reporting will not be possible for the periods where data is loaded via initial load

Core Tax reports available

  • Pro-Rata adjustments due to PR variation
  • Print Program: Advance Return for Tax on Sales/Purchases (Germany)
  • Additional List for Advance Return for Tax on Sales/Purchases
  • EC Sales List in Data Medium Exchange Format
  • Pro-Rata adjustments due to PR calculation
  • Advance Return for Tax on Sales/Purchases
  • VAT Refund
  • Tax Adjustment
  • EC Sales List

Once the tax reporting process has transitioned from source to target system, the status of date field (BSET-STMDT – the date on which the tax return was actually made) in the source system will not be reflected in the Central Finance system. Therefore, its important that when you make selection it must be taken into account that the value of this particular date field may not be accurate for periods for which reporting has been done from the source system.

Below country/region-specific reports are available in central finance with advanced compliance reporting:

  • Argentina
  • Australia
  • Austria
  • Belgium
  • Colombia
  • Canada
  • Denmark
  • France
  • Egypt
  • Ireland
  • Indonesia
  • Italy
  • Japan
  • Malaysia
  • Mexico
  • Netherlands
  • Philippines
  • Poland
  • Singapore
  • South Africa
  • South Korea
  • Spain
  • Swizz
  • Taiwan
  • Thailand
  • UAE
  • UK

Relevant SAP note2509047 – Central Finance: Required SAP Notes to support Tax Reporting out of the Central Finance System

In case you have activated external tax calculation engine with the source system then it is important to connect the same to the central finance system as well to have right tax results

Happy Reading…

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