SAP Business One and VAT One Stop Shop scheme
The purpose of this blog post is to explain, how the regulation of One-Stop-Shop can be solved in SAP Business One.
As of July 1, 2021 a new EU legislation related to the VAT One Stop Shop (OSS) scheme. The original Mini One Stop Shop regime was adopted under the Directive 2006/112/EC of the Regulations (EU) 904/2010 and 967/2012 and of the Commission Implementing Regulation (EU) 815/2012, will take effect.
The One Stop Shop provides EU- and non-EU schemes which should cover the companies’ supplies, except the already affected ones – telecommunication, broadcasting and electronic services to consumers – extended also for additional areas:
1. A taxable person established in the EU can use the Union OSS for:
- Supplies of B2C services taking place in a Member State in which he is not established;
- Distance sales of goods within the EU.
2. A taxable person not established in the EU for:
- Distance sales of goods within the EU .
3. An electronic interface (established in the EU or outside the EU) facilitating supplies of goods (deemed supplier) for:
- Distance sales of goods within the EU ;
- Certain domestic supplies of goods
The OSS scheme provides simplified procedure which allows companies to register VAT in only one EU country, regardless of how many other EU countries they are supplying. Businesses can then use a web portal in the EU country where they are VAT registered to declare and pay the VAT due in their customer’s EU country.
The new rule for this schema declares that the place of VAT taxation occurs in the member state of the customer (when the customer belongs), rather than in the member state of the supplier (where the supplier belongs). For example, a supplier established in Germany must account for VAT on all business-to-customer sales based on the EU country in which the customer was supplied with the service. This schema prevents taxable persons from having to register for VAT in each member state of consumption, but rather enables them to register only in one EU country.
According to this procedure, taxable persons registered for the One Stop Shop in the member state to which they belong electronically submit quarterly One Stop Shop VAT returns for respective supplies in other member states along with the VAT due. The country of consumption collects and distributes the VAT on behalf of the other countries, charged at the relevant national rate depending on the residence of the customer.
The following settings are required to be able to use the corresponding functionality in SAP Business One.
The basic precondition for the use the specific steps is the registration of the company for OSS scheme in a specific country (e.g. home country of the company). The registration process is not maintained inside SAP Business One.
2 Basic Setup
Maintenance Relevant Tax Codes
In the Tax Group setup it is possible to define relevant Tax Codes in respect of the Tax Rates used in the country of the delivery. The reason is that the OSS scheme usage requires the companies will need to apply the VAT rate of the EU Member State where the goods are delivered to or where the services are supplied.
Information on the VAT rates in the EU is available on both the European Commission website (https://ec.europa.eu/taxation_customs/tedb/vatSearchForm.html) and on the websites of national tax administrations of EU countries(https://ec.europa.eu/taxation_customs/business/vat/eu-country-specific-information-vat_en ).
Example for DE company delivering goods to Slovakia and Hungary:
For the simplified Tax Determination it is possible to use the Tax Code Determination functionality or set the default Tax Code on the Business Partner Master Data.
Creation of numbering series for customer invoicing
Please open the Document Numbering menuand set a document numbering series range for each of the document types Invoice and Credit Memo for your company.
Set the Business Partner Type
The OSS scheme is valid for the B2C transactions therefore it is recommended to set the setting Type of Business to Private, for the relevant Business Partners.
3 Creation of documents
User can create A/R documents standard way using the respective Tax Codes for particular Business Partners.
Please consider, that the taxation is based on country of destination. This means, that the Ship-To address is relevant for determination of the tax country and the corresponding tax code.
4 Tax Reporting
As soon as there are documents in the system it is possible to display them in the Tax Report. The OSS relevant Tax Declaration should be submitted on Quarterly basis.
On the standard Tax Report there is a need to select a period and Output Mode of the declaration: Tax Declaration.
If there is a specific numbering series used, it can be used for the selection of particular document type as well.
4 Tax Return
As for now, for the format of the Tax Declaration (it has to be provided electronically) the Electronic File Manager file format is not available. The recommended approach is to use the procedure documented in the SAP Note 2639361 – Electronic Report Generation through EFM (https://launchpad.support.sap.com/#/notes/2639361) and create the Electronic File Manager output format as print layout for the Tax Report.
Additional details can be found in the dedicated related SAP Note https://launchpad.support.sap.com/#/notes/3062304
In this blog post you could learn how it is possible to address the topic of One Stop Shop scheme in SAP Business One. The various functionalities can help you to support the business process and allows you to create the required declaration.
I would like to invite your to provide feedback or ask clarifying questions regarding the topic in the comment section. It is also possible to submit the questions via the following link: https://answers.sap.com/tags/01200615320800000816