Have been involved with Consumer Goods and Services Client based out in Germany geography.

In
recent times, the Client has decided to implement process change in supply chain model across all
business units in Europe. With new process model, there was a business need to implement Plant Abroad
functionality at Maribor location. In collaboration with SAP, pilot version of Plant Abroad functionality is
implemented at Maribor to tackle consignment and replenishment delivery process at Maribor. So made
an attempt to articulate the concept of Plants Abroad and co-related Sales setting.

Plants Abroad Scenarios

Comprehensive configuration solution for companies in European Union where companies have plants in another
European Nation.
This functionality helps to assign plants from different countries to one company code without a need of having
sales organizations in the countries where plants are located and company needs to have VAT registration
numbers in those countries where it is obligated to file VAT returns/European Sales Listings/Intrastat returns.

This can be activated to handle tax issues for companies that have VAT registration numbers in more than one
country.

Activation ensures that VAT registration number correctly gets printed on documents like sales, purchases,
invoices, correct VAT registration numbers being used for right tax calculation, stock transfers between plants get
captured for intrastat reporting correctly.

This functionality helps to process Tax returns for warehouses or sales and distribution centers abroad using
domestic company codes. i.e. Tax returns to a foreign tax authority, EC sales list for another EU country.

To enable intrastat reporting and VAT on foreign VAT registration number.

To enable Intra-Company and cross-border stock transfer. This functionality helps to create Plant Abroad Invoice
(Document type WIA) for stock transfers between foreign plant and domestic plant.

Example :- Stock transfers between foreign plant (warehouse in Maribor) and domestic plant (warehouse in GERMANY).
Two VAT registered entity, GERMAN company needs to report VAT (Intra-community acquisition of goods and reverse
charge) and trade statistics (Intrastat and Sales Reporting). Plants abroad invoice capture the trade statistics and VAT for
German Company both AR (Maribor Plant) and AP (German Company).

Configuring Plants Abroad

1.

Functionality New:

The IMG path is SPRO-Financial accounting Financial accounting global settings Tax on
sales and purchases Basic settings Plants abroad activate plants abroad. Tick the box with
the question: Plants
abroadactivated

2.

Enter the foreign VAT numbers. The IMG path is: SPRO-Financial accounting Financial
accounting global settings Tax on sales and purchases Basic settings Plants abroad Enter
VAT registration number for plants abroad

3.

With the Plants Abroad functionality activated in SAP system, then a new field Country Currency
and Exchange Rate will be available in Set Country Global Parameters configuration. Reporting
Country field will appear on the selection criteria screen on the VAT return report and EC sales
list. The VAT return report gets enhanced to show country specific currency for Reporting
Country.

4.

Create tax codes in FTXP, where field reporting country in the properties of the new tax code is
updated.

5.

Related OSS Notes for in-depth configuration:- OSS note 63103: Explains logic regarding tax
procedures if you are using plants abroad, OSS note 1085758: Customizing for stock transports ,
OSS note 850566: deactivate plants abroad for a particular company code. OSS Notes for Tax
determination for plant abroad :10560.

6.

When a company has a foreign VAT registration number in another country, it needs also to file
Intrastat returns, Intrastat ID numbers needs to set up in transaction OBY6 click on additional
details.

Plants abroad: Sales-specific settings:

1.

Billing documents needs to be created for consignment fill-ups or pick-ups and replenishment deliveries although
they are not relevant for billing as INTRASTAT declarations and tax postings depends on Billing document. Proforma invoice can be used if the plant abroad is not in the EU.

2.

Special pricing procedure (RVWIA1) is created and assigned to the new billing document (billing
type WIA) defined for replenishment deliveries and consignments between EU
countries.

3.

Structure of Pricing Procedure RVWIA1

A:- Pricing condition (PR00)

B:- Input tax in destination country (based on pricing condition)
C:- Output tax in country of departure (that is, 0% on deliveries within the EU)
D:- 100% discount R100 (based on pricing condition)
E:- Output tax in destination country (based on the 100% discount)

5. Billing type for determining taxes for plants that are abroad defined WIA(Standard type), The standard system contains
default order type WIA which is assigned to delivery types LF (consignment fill-up), LR (consignment pick-up), and NL
(replenishment), and proposes billing type WIA.

6. Copy control setting between Delivery type and Billing type

Copying requirements 010, Billing quantity D, Data VBRK/VBRP 001 Inv.split (sample) Pricing type B

7.

Maintain Billing relevance for Item Category, KBN (consignment fill-up), KAN (consignment pick-up), NLN
(replenishment) as indicator J

8. Assign G/L Account to Account Key

9. Maintain Declaration number :- INTRASTAT identification number for the countries of foreign plants is maintained and VAT
registration number in the relevant customer master records is to be updated. The customer who has been assigned to the
receiving plant must have a VAT registration number.

10. Condition records must be created for the following tax conditions type
WIA1: Input tax in country of destination, The tax code for the tax determination procedure of departure country must agree
with the tax code of the country of the company code. This is because the tax code is accessed via the company code
country during forwarding to FI. The field reporting country (that is country of destination) must be maintained in the
characteristics of the tax code.
WIA2: Output tax in the country of departure (0 % for EU-internal deliveries)
WIA3: Output tax in country of destination, The tax code for the tax determination procedure of departure country must
agree with the tax code of the country of the company code. This is because the tax code is accessed via the company code
country during forwarding to FI. The field reporting country (that is country of destination) must be maintained in the
characteristics of the tax code.
11. Base amount and cash discount Pricing Condition :
A: Settings in transaction OBY6 (company code) are no more relevant for calculating tax base and discount base on net
amount. Instead of this the
country settings (transaction OY01, Country Global Parameters, table T005) are
responsible.
B: Indicator Base amount for tax is net of discount should be used in transaction OY01. This indicator causes the base
amount for the calculation of
sales tax to be reduced by the discount share. Indicator Discount Base Net in transaction
OY01 should be flagged for the concerned company code if
its required that the sales tax is not contained in the
base amount for discount calculation.

Any Legal requirement of Countries (BE/NL/LU, ES) to have continuous Billing document number ranges can be
implemented with buffer-switch-off-function via User-exit (RV60AFZZ_NUMBER_RANGE), Refer SAP Note
(1524347) for more information.

Programs/Reports for Plant Abroad scenario:-

Process flow of Intra Company Stock Transfer :1. Creation of Stock Transfer Order (UB type), Transfer of Finished Goods from Germany based plant to Maribor.

2. Delivery Creation and Good Issue at Germany based Plant.

3:- Goods Receipt booked at Maribor based plant. For MIRO (Invoice Verification), the default country of company code
needs to be changed with change Reporting Country option, so that, this value can be posted with the respective warehouse
country.
4:- Generation of Plant Abroad Invoice WIA with respect to supplying plant Germany Plant.

Process flow of Consignment Sales Process:1:- Consignment Fill-up and Pick-up with the consignee located in European country other than the Plant / Warehouse
located country.

2:- After Goods movement is posted with movement type 631/632 respective consignment process, Plant Abroad Invoice
WIA is generated.

3:- Goods Receipt booked at Maribor based plant. For MIRO (Invoice Verification), the default country of company code
needs to be changed with change Reporting Country option, so that, this value can be posted with the respective warehouse
country.
4:- Generation of Plant Abroad Invoice WIA with respect to supplying plant Germany Plant.

Process flow of Consignment Sales Process:-

1:- Consignment Fill-up and Pick-up with the consignee located in European country other than the Plant / Warehouse
located country.

2:- After Goods movement is posted with movement type 631/632 respective consignment process, Plant Abroad Invoice
WIA is generated.

Hope you all would find the documentation useful and feel free to share your thoughts, feedback or
suggestion!
Thanks,
Sarthak
Inference / Reference :
http://help.sap.com/saphelp_erp60_sp/helpdata/en/e5/077f984acd11d182b90000e829fbfe/content.htm
http://scn.sap.com/people/praveen.kumar109/blog/2008/12/17/eu-tax-reporting-with-plants-abroad-functionality

Introduction:

1.
2.

One of the challenging things while setting up SAP system in any country is, setting up of Correct Tax System.
European Market is treated as Single Market even though it has 27 independent countries with their own Tax legislations and
Tax Rules.

3.

Any company which is doing business in EU, it must have Value Added Tax Registration Number (VAT No.) for that specific
European Country, and it must do its business under that country specific Tax Rules and Regulations.

Need of Plants Abroad Functionality:

This functionality is required under following situations:
i. A company is located in any of the European Country (E.g. Luxemburg) and has its Plant / warehouse setup in another European
Country (E.g. Germany).

ii. While setting up SAP system, company code will have the address of Companys Central Location. (i.e., address of LU)
iii. It must reports all its goods movement from or to Germany warehouse with Germany VAT number to Local Tax Authority.
iv. And in Luxemburg, the company must report all its sales and purchases as per LU Legal Regulations with LU VAT number.
v. In this case, it requires to setup two company codes for two VAT numbers, which is not advisable when Business wants to run on same
company code.
vi. So, to handle this situation, Plants Abroad functionality will be implemented, where business can be run with single company code
but with different VAT numbers.
vii. Plants Abroad functionality is used to handle tax issues for companies that have tax registration in more than one country.
viii. This functionality ensures that correct Value Added Tax (VAT) numbers are printed on the corresponding Purchasing as well as on
Sales Documents.
ix. This functionality ensures to fulfill the country specific legal requirements.
Treatment of Goods Movement in Plants Abroad:
Let us see how the following standard business processes are treated differently when Plants Abroad functionality is activated.

A) Intra Company Stock Transfer

1. Normally for Intra Company Transfers, there will not be any Invoice
between two different locations within the same company code.

generated, because, its shear Stock Transfer

2. As there is no transfer of ownership, the invoice generation is not required.

3. The standard Intra Stock Transfer process has the following steps of
i. Intra Company Purchase Order (UB)
ii. Replenishment Delivery (NL)
iii. Goods Receipt against Purchase Order (MIGO)
iv. MIRO against Purchase Order.
4. But when the two Plants / Warehouses are setup in different EU counties, and the stock is moving between them, can be treated as
goods movement across borders.
5. As per EU regulations, any goods movement between boarders is need to be reported using INTRASTAT reports.
6. INTRASTAT reports can only be generated using Invoice documents and here in this situation there will not be any invoice generated
as this stock transfer is treated as goods movement but not any sales
7. So we can generate a new invoice which is called as Plants Abroad Invoice, so that,
i. It can be captured in INTRASTAT, to follow tax regulations.
ii. As this is ZERO valued invoice, this can be treated as just a goods
movement and not sale.
8. With this implementation, the new Intra Stock Transfer process will be as follows:
i. Intra Company Purchase Order (UB)
ii. Replenishment Delivery (NL)
iii. Goods Receipt against Purchase Order (MIGO)
iv. Plants Abroad Invoice (WIA)
v. MIRO against Purchase Order.

B)

Consignment Sales Process

1. Consignment Process will have four steps i.e., Consignment Fillup, Consignment Issue, Consignment Return and Consignment
Pickup.
2. Out of these four steps, only Consignment Issue and Consignment Returns can be treated as actual sales to customers and the
respective invoices can be generated.
3. Consignment Fillup and Pickup can be treated as just a goods movement and cant be treated as any sales.
4. But when, Consignment Fillup and Pickup is done and the consignee is located in any EU country other than the Plant / Warehouse
located country, then this goods movement is need to be reported as per the EU tax regulations.

5. So, Plants Abroad invoice is generated so that these movements can be captured in INTRASTAT and these invoices are ZERO
invoices as there is no sale and this is only goods movement.

Effects of Plants Abroad Implementation:

1. Once the Plants Abroad functionality is activated in SAP system, then a new field Country Currency and Exchange Rate will be
shown in Set Country Global Parameters configuration.

2. This Country Currency is maintained with respective country currency for all those countries which have company code and the
respective Exchange Rate Type is also maintained, otherwise, accounting documents will not be generated.
3. While creating new tax codes or maintaining existing tax codes, a new field Reporting Country will be shown.

4. This field must be maintained with the respective reporting country, so that, these tax codes will be reported in the respective country
Tax Reports. Otherwise, the country wise tax reports cant be generated.
5. While doing MIRO (Invoice Verification), the default country of company code will be shown in the document, so, this must need to
be changed with change Reporting Countryoption, so that, this value can be posted with the respective warehouse country.

6. Due to Plants Abroad activation, while generating advance tax reports (RFUMSV00), there will be new field Tax Return Country
and a new check box Country Currency instead of Local Currency will be available in Further Selections.

7. Here we have to give, the country code for which the Tax Report is generated (say LU or IT or DE) and need to check the check box
of Country C instead of local C (if the company code country currency and Plant / warehouse country currency are not same) so that
the report can be generated in Local Currency and not with the currency of Company code country.
8. And while executing INTRASTAT Arrivals and INTRASTAT Dispatch reports, need to give the fields Country of Declaration and
Dec Currency so that the report can be generated based on this declaration country and currency, because the same company code is
maintained in different countries with different VAT numbers for different Plants / Warehouses.

Conclusion :
Plants Abroad Functionality ensures to run the business as per the European Tax regulations and provide correct Tax Reports and
INTRASTAT reports, when companies have their plants / warehouses in other European Countries and stock movements are done from
those countries.

Alert Moderator

1 Comment