ARASCO VAT IMPLEMENTATION

Cutover strategy for Go-Live

ARASCO_Cutover strategy
 Table of Contents
FI/CO Cutover Strategy................................................................................................................................ 3

Master data............................................................................................................................................. 3

General Ledger Master............................................................................................................................ 3

Tax codes:................................................................................................................................................ 3

Number range maintenance:................................................................................................................... 4

Condition records for condition type....................................................................................................... 4

Material Management Cutover Strategy...................................................................................................... 5

Master Data............................................................................................................................................. 5

Vendor Master......................................................................................................................................... 5

Material Master....................................................................................................................................... 5

Condition records for tax code determination......................................................................................... 6

Vendor Invoice posting for Open PO’s..................................................................................................... 6

Sales and Distribution Cutover Strategy....................................................................................................... 6

Customer Master Data............................................................................................................................. 6

Customer Tax Classification.................................................................................................................. 6

Customer VAT Reg. No. and DZIT No.................................................................................................... 7

Material Master Data............................................................................................................................... 8

Condition records for Output Tax condition type..................................................................................... 9

Condition records for ZVAT Output Print condition type.......................................................................10

Number ranges for sales order/billing type for intercompany transactions...........................................10

4. Cutover Transaction Data for SD into the SAP System.......................................................................10

Open Sales Orders.............................................................................................................................. 10

Open Sales Orders: Partially delivered............................................................................................... 12

Open Sales orders: Fully delivered but not billed...............................................................................12

Open Sales orders: Partially delivered and billed...............................................................................12

ARASCO_Cutover strategy
FI/CO Cutover Strategy
Master data
The following steps clear the concept of Master data need to be create into the
SAP System.
 General Ledger Masters - (FI)
 Tax codes

General Ledger Master

The following new GL accounts are required to create into SAP system as below: .

Account Account
 Account Description Account Group Nos.
Nos. Type
11506010 VAT  Input - Goods Asset Prepayments & Other Debit Balances (Net)
11506020 VAT  Input - Services Asset Prepayments & Other Debit Balances (Net)
VAT  Reverse Input Charge -
11506030 Asset Prepayments & Other Debit Balances (Net)
Goods
VAT  Reverse Input Charge -
11506040 Asset Prepayments & Other Debit Balances (Net)
Services
VAT  Deposit Account (Adv.
11506050 Asset Prepayments & Other Debit Balances (Net)
from Customer)
21506010 VAT  Output - Goods Liability Accrued Expenses & Other Credit balances
21506020 VAT  Output - Services Liability Accrued Expenses & Other Credit balances
VAT  Reverse Output Charge -
21506030 Liability Accrued Expenses & Other Credit balances
Goods
VAT  Reverse Output Charge -
21506040 Liability Accrued Expenses & Other Credit balances
Services
VAT  Payment Account (Adv.
21506050 Liability Accrued Expenses & Other Credit balances
to Supplier)
21506060 VAT  Control Account Liability Accrued Expenses & Other Credit balances

The following new Tax codes are required to create into SAP system

Tax codes:
Tax Code Tax Code Description
S0 SA Output No Tax
S1 SA Output VAT 0% Goods
S2 SA Output VAT 5% Goods
S3 SA Output VAT 0% - services
S4 SA Output VAT 5% - services
S7 SA Output VAT Exempted
V0 SA Input No Tax
V1 SA Input VAT 0% Goods
V2 SA Input VAT 5% Goods

ARASCO_Cutover strategy
 V3 SA Input VAT 0% - services
V4 SA Input VAT 5% - services
V7 SA Input VAT Exempted
VV SA reverse charge VAT 5% - Goods ( newly created)
VX SA reverse charge VAT 5% - Services
VY SA Input VAT Import Goods 5%

Number range maintenance:

The number range maintenance for each entity falling under one VAT group should have
one sequence of number range for FI manual postings. This has to be done via FBN1 transaction

Condition records for condition type

Condition records to be maintained for condition with validity date and amount for
respective tax codes. Below is the snapshot for FV11 screen.

ARASCO_Cutover strategy
Material Management Cutover Strategy
Master Data

 Vendor Master
 Material Master
 Tax code determination condition record
 Vendor invoice posting for open PO’s

Vendor Master
VAT registration number (15 digits for the GCC states) needs to be maintained in
vendor master for the vendors.
Transaction “XK99” can be used to maintain VAT registration number in vendor
master for multiple vendors in one go.

Material Master

Material is applicable for No tax/Full tax/Half tax and it must be maintained in

material master in field “Tax ind. f. material” to get the Tax applicability in
purchasing view.
Transaction “MM17” can be used to maintain “Tax ind. f. material” in material
masters for multiple materials in one go.

ARASCO_Cutover strategy
Condition records for tax code determination
Condition record need to be created in transaction “MEK1” which would be used to
determined tax code automatically in purchase order.

Vendor Invoice posting for Open PO’s

There could be following possible scenarios for vendor invoice posting: -

a) Tax code can be maintained in Purchase Order line item.
b) Tax code can be entered while posting vendor invoice in transaction “MIRO”.

This must be decided at business end on transaction basis whether tax code would be
update in PO or in Invoice i.e. “MIRO”.
Note: - There is the dependency of Vendor Invoice received during transition period from
non-applicable to applicability of VAT.

Sales and Distribution Cutover Strategy

Customer Master Data

Customer Tax Classification

Customer tax classification to be updated in customer master. The customer tax
classification, along with other criterion, will in-turn determine tax condition and value in
sales orders.

ARASCO_Cutover strategy
  0 – No Tax
 1 – Full Tax

Customer VAT Reg. No. and DZIT No.

 VAT Reg. No. of the customer, wherever applicable to be updated in the
filed VAT Reg. No. in customer master.

 DZIT No. to be updated in customer master wherever applicable in filed

Tax number 4 (this filed needs to be activated)

ARASCO_Cutover strategy
Material Master Data
Material tax classification to be updated in material master. The material tax classification,
along with other criterion, will in-turn determine tax condition and value in sales orders.

 0 – Tax Exempt for Goods

 1 – No Tax for Goods
 2 – Full Tax for Goods
 3 – Tax Exempt for Services
 4 – No Tax for Services
 5 - Full tax for Services

ARASCO_Cutover strategy
Condition records for Output Tax condition type

Condition records to be maintained for output tax condition with validity date and amount
for respective tax codes. Below is the snapshot for VK11 screen.

ARASCO_Cutover strategy
Condition records for ZVAT Output Print condition type
Condition records for output condition type ZVAT should be maintained for billing output
type to be executed.

Number ranges for sales order/billing type for

intercompany transactions
No. ranges to be maintained for new sales order/delivery type and billing type created for
intercompany sales.

4. Cutover Transaction Data for SD into the SAP

System.

Open Sales Orders

For open sales orders after 31st dec’17, following activities need to be
performed for activation tax condition:

 Change pricing date to current date in sales order (VA02)

 Update tax classification for customer (VA02: Header data) and material
(VA02: Item data)

ARASCO_Cutover strategy
 Update pricing at sales order header level with G: Copy pricing elements
unchanged and re-determine taxes to see the effect of tax condition in sales
order pricing.

ARASCO_Cutover strategy
Open Sales Orders: Partially delivered
For open sales orders: partially delivered, after 31st dec’17, following activities
need to be performed for activation tax condition:

 Change pricing date to current date in sales order (VA02)

 Update tax classification for customer (VA02: Header data) and material
(VA02: Item data)
 Update pricing at sales order header level with G: Copy pricing elements
unchanged and re-determine taxes to see the effect of tax condition in sales
order pricing.
 The delivery created, when billed will have tax condition in billing.

Open Sales orders: Fully delivered but not billed

For open sales orders: Fully delivered but not billed, after 31st dec’17,
following activities need to be performed for activation tax condition:

 Change pricing date to current date in sales order (VA02)

 Update tax classification for customer (VA02: Header data) and material
(VA02: Item data)
 Update pricing at sales order header level with G: Copy pricing elements
unchanged and re-determine taxes to see the effect of tax condition in sales
order pricing.
 The delivery created, when billed it will have tax condition in billing.

Open Sales orders: Partially delivered and billed

For open sales orders: partially delivered and billed, after 31st dec’17,
following activities need to be performed for activation tax condition:

 Change pricing date to current date in sales order (VA02)

 Update tax classification for customer (VA02: Header data) and material
(VA02: Item data)
 Copy the non-billed quantity/item to new line in existing sales order.
 Update pricing at sales order header level with G: Copy pricing elements
unchanged and re-determine taxes to see the effect of tax condition in sales
order pricing.
 Create delivery w.r.t. sales order, when billed it will have tax condition in
billing.

ARASCO_Cutover strategy