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Author's profile photo Vinod Jadhav

LEGAL VAT TAX CHANGE – New VAT Rates for Germany due to legal change on 01.07.2020

On June 4th 2020, the grand coalition, agreed on a €130 billion economic stimulus package aimed at kick-starting the economy and supporting people in Germany. From 01.07.2020 the VAT Tax rates in Germany will change. Federal Parliament (German Bundestag) and Federal Council (German Bundesrat) still must agree to the reduced value added tax.

That is why the tax rates need to be changed. The VAT rate 19% will change to 16% and the VAT rate 7% will change to 5%. The tax rates need to be changed and make use of them in the area of Sales, Procurement, Real Estate, Concur might need to be adapted.

For S/4HANA Cloud (ES) please check SAP Note https://launchpad.support.sap.com/#/notes/2936050

· For S/4HANA (On Premise) please check SAP Note https://launchpad.support.sap.com/#/notes/2934992

SAP solution for S/4HANA Cloud (ES)
With Time Dependent Tax (TDT) customers can create tax codes, change tax codes, including the description and tax rate. TDT enables you to add validity periods to your existing tax codes.

· If If you activated Germany in SAP S/4HANA Cloud during or following the 1908 release, then TDT is active for Germany by default.

· If customer activated Germany prior to 1908, then customer might have already migrated to TDT for Germany.

· If not, customer are required to run the migration to TDT. Because TDT enables the customer to create tax codes, change tax rates with validity periods to your existing tax codes in the event of a legal change, like the one we’re talking about here. With TDT customer can change the VAT codes from 19% to 16% and the VAT rate 7% to 5% for the time period between July 1 and December 31, 2020, and this helps customer to follow the upcoming VAT changes. Customer should reserve time of 1-2hrs for the TDT migration. During the migration no documents must be posted, and no purchase order must be changed.

Please consider below information:

· SAP Note 2936050 – Legal VAT Changes in DE for S/4HANA Cloud customers

· Here is the link to TDT help page and how it could help you:

· TDT help page

· Among other materials here, we have two how-to videos that may help you, one showing how to migrate to TDT, and another showing you a use case of how it works in your system.

· TDT Video Using Time-Dependent Taxes SAP S/4HANA Cloud 1908

· Activating TDT Video Activating Time-Dependent Taxes SAP S/4HANA Cloud 1908

Please check on the SAP Notes that contain important information about TDT before you migrate.

· SAP Note 2819322: Time Dependent Tax impact on the usage of MM Web Services for posting of invoices

· SAP Note 2818970: Web Service JournalEntryCreateRequestConfirmation_In and Time Dependent Tax

· SAP Note 2809073: The Purchasing Info Record was enhanced by the tax calculation valid from date for the Time Dependent Tax Calculation

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      3 Comments
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      Author's profile photo Anoop Das
      Anoop Das

      Thanks for sharing. Could you also please detail the countries which are countries TDT is activated.

      Author's profile photo Vinod Jadhav
      Vinod Jadhav
      Blog Post Author

      TDT was delivered in S/4HANA Cloud for following countries in the cloud releases

      1908: Germany
      1911: Hong Kong
      2002: China, Italy New Zealand, Slovakia, South Korea
      2005: Spain, UK

      Author's profile photo Vinod Jadhav
      Vinod Jadhav
      Blog Post Author

      For S/4HANA Cloud please check also SAP Note 2939527 which in the SAP Note 2936050 ‚Legal VAT Changes in DE for S/4HC customers‘. ‎#VAT ‎#Germany ‎#tax ‎#Mwst