Table of Contents

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Preface
13
Objective of This Book
13
Readers of This Book
14
Structure of This Book
14
Acknowledgments
16
1 Introduction to Taxes with SAP S/4HANA
17
1.1 The Tax Function
17
1.1.1 SAP S/4HANA as a Unique Occasion for Tax Functions
17
1.1.2 Challenges and Requirements
18
1.2 The Tax Operating Model and SAP S/4HANA
22
1.2.1 IT Infrastructure and Architecture
23
1.2.2 Tax Data Management
24
1.2.3 Tax Processes
26
1.2.4 Tax Talents
27
1.2.5 Governance and Organization
28
1.2.6 Tax Business Case
29
1.3 Taxes with SAP S/4HANA
30
1.3.1 What’s New?
30
1.3.2 SAP Solutions for Global Tax Management
36
1.4 Getting Started with SAP S/4HANA
47
1.4.1 Deployment Alternatives
47
1.4.2 Migration Strategies
48
1.4.3 SAP Activate Project Methodology
51
1.5 End-to-End Processes
55
1.5.1 Tax Processes
55
1.5.2 Business Processes
58
1.6 Summary
60
2 Indirect and Direct Tax Requirements
61
2.1 Indirect Tax
61
2.1.1 Global Indirect Tax Systems
61
2.1.2 Taxable Events
68
2.1.3 Tax Exemptions
70
2.1.4 Grouping
72
2.1.5 Transaction Types
74
2.1.6 Standard Reporting Requirements
76
2.1.7 Digital Reporting Requirements
80
2.2 Direct Taxes
86
2.2.1 Base Erosion and Profit Shifting
86
2.2.2 Base Erosion and Profit Shifting 2.0
88
2.2.3 Standard Audit File for Tax
91
2.2.4 Financial Reporting Standards
93
2.2.5 Tax-Relevant Reporting Requirements
93
2.3 Summary
95
3 Basic Settings in SAP S/4HANA
97
3.1 Financial Accounting
97
3.1.1 Tax Codes
97
3.1.2 Tax Accounts
116
3.1.3 Plants Abroad
119
3.1.4 Exchange Rates
126
3.2 Sales and Distribution and Materials Management
133
3.2.1 Tax Classifications
133
3.2.2 Tax Identification Numbers
145
3.2.3 Tax Determination with Pricing
156
3.3 Integration of SAP Modules in Tax Determination
160
3.3.1 Materials Management and Financial Accounting
160
3.3.2 Sales and Distribution and Financial Accounting
163
3.4 Smart Forms
170
3.5 Summary
173
4 Indirect Tax Determination in SAP S/4HANA
175
4.1 Condition Logic in SAP
175
4.1.1 Price Calculation Procedure
176
4.1.2 Condition Types
181
4.1.3 Access Sequence
184
4.1.4 Condition Tables
187
4.1.5 Access Requirements
197
4.2 Indirect Tax Determination in Purchasing
198
4.2.1 Electronic Data Interchange versus Purchase Info Records
198
4.2.2 Purchase Order
200
4.2.3 Invoice Posting
201
4.2.4 Customization Scenarios
202
4.2.5 Solutions for Procurement
204
4.3 Indirect Tax Determination in Sales
208
4.3.1 Sales Order
208
4.3.2 Invoice
212
4.3.3 Customization Scenarios
215
4.4 Special Indirect Tax Transactions
217
4.4.1 Chain Transactions/Drop Shipments
217
4.4.2 Internal Stock Transfers
227
4.4.3 Special Payment Processes
235
4.5 Summary
249
5 Indirect Tax Engines and Add-Ons
251
5.1 SAP Condition Logic
251
5.2 Add-Ons
253
5.3 Tax Service with SAP
253
5.4 External Tax Engines
256
5.5 Decision Support for Vendor Selection
258
5.6 Summary
260
6 Custom Coding for Indirect Taxes
261
6.1 ABAP Basics for Indirect Tax
262
6.1.1 User Exits, Customer Exits, and Business Add-Ins
262
6.1.2 Objects
263
6.1.3 Includes, Functions, Subroutines, and Programs
264
6.1.4 ABAP Statements
265
6.2 User Exits for Tax Determination in Sales
266
6.2.1 Sales Orders
267
6.2.2 Invoices
274
6.2.3 Additional Enhancements
276
6.3 Customer Exits for Tax Determination in Purchasing
280
6.3.1 Identifying Customer Exits
281
6.3.2 EXIT_SAPLMEKO_001
284
6.3.3 EXIT_SAPLMEKO_002
287
6.3.4 Additional Enhancements
288
6.4 Summary
289
7 Direct Taxes in SAP S/4HANA
291
7.1 Direct Tax Basics
291
7.1.1 End-to-End Process for Direct Taxes
292
7.1.2 Direct Tax Organizational Structures and Master Data
294
7.2 Organizational Structures
295
7.2.1 Ledger
295
7.2.2 Company Code
310
7.2.3 Chart of Accounts
312
7.2.4 Withholding Tax
316
7.3 Master Data
317
7.3.1 Business Partner
318
7.3.2 General Ledger Account
319
7.3.3 Asset
321
7.4 Tax Tagging
322
7.5 Direct Tax Data Analytics and Monitoring
326
7.5.1 SAP Tax Compliance
328
7.5.2 Embedded Analytics
329
7.5.3 Comparative Review
331
7.6 Direct Tax Filing and Reporting
332
7.6.1 SAP Profitability and Performance Management
333
7.6.2 SAP Document and Reporting Compliance
337
7.7 Direct Tax Planning with SAP Analytics Cloud
340
7.7.1 Direct Tax Planning Scenarios
341
7.7.2 Map Fiscal Application Scenarios
342
7.7.3 Implement Tax Scenarios
344
7.8 Summary
347
8 Managing Transfer Prices in SAP S/4HANA
349
8.1 Operational Transfer Pricing
349
8.1.1 Tax Transfer Prices
350
8.1.2 Management Transfer Prices
350
8.1.3 Operational Transfer Prices
350
8.1.4 Transfer Pricing Process
351
8.1.5 Challenges and Requirements
355
8.2 Transfer Price Calculation
357
8.2.1 Cost-Plus Method in SAP S/4HANA
358
8.2.2 Resale-Minus Method in SAP S/4HANA
361
8.2.3 SAP Profitability and Performance Management
363
8.3 Transfer Price Determination
364
8.4 Transfer Price Monitoring and Adjustments
364
8.4.1 Extend Universal Journal
365
8.4.2 Derivation and Validation
368
8.4.3 Indirect Cost Allocation Limitations
369
8.4.4 SAP Profitability and Performance Management
369
8.5 Transfer Price Reporting and Simulation
371
8.6 Transfer Price Testing and Compliance
373
8.6.1 Transaction Matrix
374
8.6.2 Country-by-Country Reporting
375
8.7 Summary
377
9 Tax Reporting in SAP S/4HANA
379
9.1 Worldwide Tax Reporting Requirements
379
9.1.1 The Five Fingers of Tax Administration
380
9.1.2 Maturity of Tax Reporting Requirements
381
9.1.3 Tax Record Evidence Requirements
383
9.1.4 Global Tax Reporting Compliance Models
384
9.2 Standardized Tax Reporting in SAP
385
9.2.1 Standard Report for Value-Added Tax Returns
385
9.2.2 Standard Reports for EC Sales List
394
9.3 SAP Document and Reporting Compliance for SAP S/4HANA
398
9.3.1 Setting Up Compliance Reporting
398
9.3.2 Setting Up EC Sales Reporting
407
9.3.3 Electronic Document Processing
408
9.4 Summary
412
10 Tax Monitoring in SAP S/4HANA
413
10.1 Why Monitor Tax?
413
10.1.1 Compliance Risks
414
10.1.2 Efficiency Improvements
415
10.1.3 Cash Flow Optimization
416
10.2 Tax Monitoring Requirements
417
10.3 Tax Control Framework
419
10.4 SAP Solutions for Indirect Tax Monitoring
424
10.4.1 SAP S/4HANA Embedded Analytics
424
10.4.2 SAP Analytics Cloud
425
10.4.3 SAP BW/4HANA
426
10.4.4 SAP Tax Compliance
426
10.5 Monitoring with SAP Tax Compliance
429
10.6 Summary
438
Appendices
439
A Europe
441
A.1 Intrastat Report
441
A.2 EC Sales and Purchase List
459
A.3 Standard Audit File for Tax
460
B India
461
B.1 Tax Determination
461
B.2 Stock Transfers
463
B.3 Multiple Tax IDs
464
B.4 Official Document Numbering in Sales and Distribution
464
C North America
465
C.1 Jurisdiction Codes
465
C.2 Tax Codes
466
C.3 Tax Types
468
D The Authors
473
Index
475