Using the Generic Tax Return in SAP Business ByDesign

This blog describes how to use the Generic Tax Return in SAP Business ByDesign. The generic tax return feature is used for tax reporting purposes for countries/regions that are not localized in SAP Business ByDesign. This is a payment-relevant tax return type.

For more information about generic tax returns, see:

Generic Tax Return as Tax Return Type

(The online help provides you with the list of countries/regions for which a generic tax return is available. In case your country/region is not listed, you can contact SAP for delivery of the generic tax return for your country/region.)

The generic tax return selects all  tax  events for  a  country/region. When you release a tax return of  type Generic  Tax  Return, the  system  performs  all  related  postings  to  clear  the  input  and  output  tax accounts against a tax liability account for the tax items in the given period.

Generic Tax Return – Details :

  • There is only one tax return type per country/region.
  • “999 – Tax Return” is supported.
  • The data provided is not presented according to the reporting requirements of the country/region (e.g., tax boxes). Amounts are available per tax event and not according to reporting criteria.

Using Generic Tax Returns

This section describes how to use the generic tax return feature for Finland.

Tax Authority

You must set up a tax authority for Finland that contains a tax return arrangement for tax return type “999 – Tax Return” (this is referred to as the generic tax return in the system).

Period VAT Return

You must create VAT items for tax country Finland (for example, Supplier or Customer Invoices or Manual Postings). The report All VAT /Sales Tax Items in our example for tax country Finland looks like the following before creating the generic tax return:

The Generic Tax Return for Finland based on the above displayed data looks like this. The items are grouped by due category and tax event.

Once you release the generic tax return, the system offsets the input/output tax accounts and posts the balances to the tax payable account (which is the reconciliation account of the tax authority).

In the report Reported VAT / Sales Tax Items, choose the ID of the released tax return in the selection screen. This shows all items that are selected by this tax return. In this report, you can group the items by all available parameters and create summary lines.

You can also view the tax code. The example below is an aggregated view of all items based on tax code and due category.

You can either use this report (with the different selection criteria fields as shown in the screenshots shown above) or download this item list into Microsoft Excel™ to finalize the data before reporting it to the tax authority. All figures that are sent to the tax authority are based on the finalized data derived out of the report.

For auditing reasons, the file can be uploaded as an attachment to the tax returns.

The payment of the generic tax return works in the same way as for other tax returns; you can either trigger a payment from the Tax Management work center, or you can assign a payment from the Payment Management work center to the tax return.

Yearly VAT Return

If a country/region has a separate annual tax return, in addition to monthly tax returns, you can handle it in the following way as there is no possibility to create two tax return arrangements based on a generic tax  return, one for monthly and the other for annual. The proposed solution is as follows:

  1. Create twelve tax returns to meet the requirements of the monthly tax returns (follow the steps as described above in the ‘Period VAT Return’ section).
  2. For the annual tax return, create and release a thirteenth tax return for the whole year, but  with the same tax return arrangement. This tax return selects all items that have not been  reported by any of the monthly tax returns.
  3. Open the report, Reported VAT / Sales Tax Items, and enter the IDs of the thirteen tax returns of the year in the selection.
  4. With the selected data, continue in the same way as described above in the ‘Period VAT Return’ section.

Summary

The overall goal is to open tax return related objects so that you can create a tax return for non- localized countries/regions.

Using the SAP Cloud Applications Studio, partners can create a new tax return type for a  non-localized country/region. They can then define the mappings for tax events and tax types to the newly created tax return type. They can also define tax boxes, if the return is a summary return, or define grouping criteria if the return is a group type return.