SAP recently released a memorandum (SAP Note 1298748) on the EU package for value-added tax or VAT tax, 2010. In this Note, SAP warns their customers that they are currently working to implement the new requirements, but that due to missing implementing provisions of the various EU member states that they are not ready yet.
Due to the distinction between B2B and B2C type of transactions, SAP is working to provide control options in Customizing for tax codes for the processing of taxes on sales/purchases for services. In their Note, SAP explains this as follows.
Business to Business (B2B)
For supplies of services to a taxable recipient of a service, the general rule with respect to the place of supply of services should be based on the place where the recipient of a service has established his business. Furthermore, the tax liability is shifted to the recipient of the service. To enable uniform posting for documents of the new directive, new tax codes for the relevant country of the service provider and service recipient have to be configured.
The service provider has to create a new output tax code with 0 %. For the service recipient, a new "Reversed Charge" tax code with the tax rate for services that is valid in the relevant country has to be defined. The indicators are to be created in Customizing ("Financial Accounting Global Settings -> Tax on Sales/Purchases -> Calculation -> Define Tax Codes for Sales and Purchases").
Example of the procedure for suppliers of a service: Define an output tax code in the relevant tax procedure; Tax type A – Output tax, EU code 4 (Output Tax for Services VAT 2010), Tax Type Output Tax (MWS) 0%.
Example of the procedure for the service recipient: Define an input tax code in the relevant tax procedure; Tax type V – Inputtax, EU code 5 (Input Tax for Services VAT 2010), Tax Type Input Tax (VST) 19 % (for example, for Germany) and Output Tax (MSW) – 19 % (for example, for Germany).
Be aware that if the total input tax is no non-deductible, you have to review another Note (98181) for a configuration example for the relevant tax types. The EU codes 4 and 5, which are required in the future, are currently not available in the system. SAP will deliver the tax codes as soon as they are available.
Business to Customer (B2C)
For supplies of services to non-taxable persons (usually consumers), the general rule with respect to the place of supply of services should be based on the place where the supplier of services has established his business. In this case, the tax liability remains with the supplier of the services.
Since the country-specific implementation provisions are missing, it is currently not certain if and in which EU member states business transactions of this type have to be reported in the EC sales list. If this is required in some countries, a new output tax code with a country-specific tax percentage rate for services has to be configured for the sovereign of incorporation of the supplier of services.
Example for procedure: Define an output tax code in the relevant tax procedure; Tax type A – Output tax, EU code 4 (Output Tax for Services VAT 2010), Tax Type Output Tax (MWS) 19 %.
This is all the SAP user community has received from SAP to prepare their Transaction Tax systems for 2010.