RITA – Registration for Indirect Taxation Abroad – Part 2

In Part2 of the series, we will discuss configuration that might be needed to do in the system that you migrate and activate RITA.

Note: All the configurations settings are to be transported to the production system. Prerequisite, RITA should be Migrated and activated in the production system too.

Tax Box Mapping

Businesses need to report foreign taxable income in a specific tax box.

App: Maintain Tax Box Mapping for Advanced Tax Return

Role: Configuration Expert

Step1. Select company code, country/Region

Step2. In the Tax box structure select the item for the tax year.

Now in the below image, we see the Rept C/R – reporting country/region field since RITA is activated.

Step3. Create a new entry, where we Will map foreign registration to tax box 45.

Map foreign registration NL, foreign tax code for that registration, valid from, tax process key, Credit/Debit.

All the tax-relevant posting for this tax code in this country will be mapped to tax box 45 for the tax return.

Define Accounts for RITA transactions.

For example: Define tax account for German company code to use for French transactions.

App: Automatic Account Determination

Role: Configuration Expert

Step 1. Enter Area, Subarea, and Process

Step 2. Enter transaction group and COA.

The above two highlighted fields are:

Country/Reg: it is for company code country or Region

Tax Ctry/Reg: It is for foreign registration country or Region

Select Add and enter information in the new line

Tax code: V1, Country/Reg: Germany, FR as foreign registration country and account to assign. There is an option to review the account assignment too, which throws errors in case of wrong settings.

There can be the same tax code set up for Germany (company code country) as well as France (foreign country), so these account assignments help to differentiate accounts.

Foreign VAT Registration Numbers

App: Define Foreign VAT Registration Numbers OR Enter VAT Registration Number for Plants Abroad or RITA

Role: Configuration Expert

Add company code, foreign registration country or region key, and VAT number assigned by authorities in that region.

Define Countries or Regions

App: Define Countries/Regions

Role: Configuration Expert

Step1. Navigate to the country, Germany, DE.

Step2. Details for the entry for DE shows blue highlighted lines these flags appear when a company code is activated for RITA. They need to be the same at the company code level and country or region level.

Where RITA is active we need to clear or reset these flags at the country or region level, not at the company code level.

Disclaimer: all the possible or needed settings are not covered as they may differ depending on company code and foreign registration countries/Regions.

Caution

Registration for Indirect Taxation Abroad (RITA) is currently available in your testing system for testing purposes. It is vital that you read and understand SAP Note 2907372  before proceeding. It is also advisable to read other SAP Notes linked from this SAP Note that pertain to the scope of your planned use of RITA.

SAP knowledge base and Best practices: SAP Best Practices

SAP S/4HANA Cloud User Community: Follow it

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