2022-05-04 2728767

2728767 - Definition of tax boxes for MTD UK VAT return

based on SLH ACRs solution
Version 40 Type SAP Note
Language English Master Language English
Priority Recommendations / Additional Info Category Consulting
Release Status Released for Customer Released On 21.02.2022
Component XX-CSC-GB-FI ( Financial Accounting )

Please find the original document at https://launchpad.support.sap.com/#/notes/ 2728767

Symptom

You are about to define, check or update configuration of tax boxes for periodic reporting of VAT in United
Kingdom.

Other Terms

UK VAT, Tax codes, FTXP, OBCH, OBCG, VG_CUST, MTD, T007A, A003, SLH, ACRs, SAP Localization
Hub

Reason and Prerequisites

Settings need to be defined in cluster view VG_CUST for MTD reporting via SLH ACRs solution.

Solution

PHASE 1 - Collection of required information

1. Check GB tax codes defined in your system. Execute transaction S_ALR_87009903 or program
RF_STEUERINFO in transaction SE38. Enter country GB and the Chart of Account used by the company
code for which you plan to run VAT return. You shall receive output with similar entries to following list (in
case of plants abroad scenario enter the country and the chart of account for your company code, output will
be enhanced with Rep. Cntry column containing GB entries):

Tax information for: United Kingdom

Tax scheme: TAXGB

Tax Code Tax Type Error mess. EUCde/Cde Description

MWSKZ MWART PRUEF EGRKZ TEXT1
A0 A X Exempt from output VAT
A1 A X Standard rated output VAT: 20 %
A3 A X 1 Delivery of goods within EC
A4 A X 4 Delivery of Services within the EC
A5 A X 3 Subcontracting within EU
A6 A X Reduced rated output VAT: 5 %
A7 A 0% Rated Output VAT
V0 V Exempt from input VAT
V1 V Standard rated input VAT: 20 %
V2 V Standard rated, nondeductible VAT: 20 %

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V3 V 9 Acquisition of goods within EC
V4 V 9 Acquisition of services within the EC
V5 V 9 Subcontracting within EU
V6 V Reduced rated input VAT: 5 %
V7 V Input VAT: 20% - 50% non-deductible (allocated)
V8 V Input VAT: 20% - 50% non-deductible (not alloc.)
V9 V 0% Rated Input Tax
VA V 9 Acquisition of services outside of the EU
X0 V Outside the scope of VAT: Input
Y0 A Outside the scope of VAT: Output
Y1 A Outside the scope of VAT: Output Notice 741a

2. Check if your tax codes are complete and defined correctly in terms of the EU code. Output list
corresponds to table entries in table T007A. Use transaction FTXP and navigate to "Properties" button.

3. In case you are using different tax codes please try to map them to tax codes in the table above, this will
be used than for easy assignment to the respective Tax Group.

For example: Your tax code ZZ is not provided in the list above however its definition is the same as tax code
A1 in the list above and therefore your tax code ZZ will follow the group assignment of tax code A1 i.e. will be
assigned to tax group 1.

4. Verify Tax Procedure in transaction OBYZ. If the relevant Tax Procedure is not known it can be determined
based on company code country defined in transaction OBY6. Then transaction OY01 shows active Tax
procedure (field T005-KALSM) for respective country. Calculation procedure shall be defined similarly to this:

Step Counter Condition type Description From Step To Step Account Key
100 0 BASB Base Amount 0 0
110 0 MWAS Output Tax 100 0 MWS
120 0 MWVS Input tax 100 0 VST
Non-deduct.Inp
130 0 MWVN 100 0 NAV
ut Tax
Non-deduct.Inp
140 0 MWVZ 100 0 NVV
ut Tax
150 0 NLXA Acquisition Tax Cred 100 0 MWS (ESA)
160 0 NLXV Acquisition Tax Deb. 100 0 VST (ESE)

5. Check Tax Transactions (Account Keys) used in your Tax procedure against those one described here as
example configuration. Try to map them. For example reverse charge tax codes might use ESA instead MWS
and ESE instead VST.

Tax Processing Description

MWS Output tax
VST Input tax
NAV Non-deduct.input tax
NVV Non-d.input tax dist
ESA Output acquisition tax
ESE Input acquisition tax

6. Pay attention to setup of EU or domestic reverse charge tax codes. Both condition types shall refer to base
Amount (BASB line). Percentage shall be MWS (ESA) with "-" % and VST (ESE) same percentage rate
without any sign. See example for V3 tax code.

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Tax Code: V3 - Acquisition of goods within EC

Tax type: Input tax

Condition type Description Percentage Level From Acct key

BASB Base Amount 100
MWAS Output Tax 110 100 MWS
MWVS Input tax 120 100 VST
Non-deduct.Input
MWVN 130 100 NAV
Tax
Non-deduct.Input
MWVZ 140 100 NVV
Tax
NLXA Acquisition Tax Cred 20.00- 150 100 MWS (ESA)
NLXV Acquisition Tax Deb. 20.00 160 100 VST (ESE)

7. Following tax boxes are subject of GB VAT return reporting, note: box 3 and 5 are calculated boxes

Tax Box Description

BOX 1 VAT due on sales and other outputs
BOX 2 VAT due on acquisitions from other EC Member States
BOX 3 Total VAT due (Box 1 + Box 2)
BOX 4 VAT reclaimed on purchases and other inputs (including acquisitions from the EC)
Net VAT due - Take the figures from Box 3 and Box 4. Deduct the smaller figure from the
BOX 5
larger one and put the difference in Box 5
BOX 6 Total value of sales and all other outputs excluding any VAT
Total value of purchases and all other inputs excluding any VAT (including exempt
BOX 7
purchases)
Total value of all supplies of goods and related costs, excluding any VAT, to other EC
BOX 8
member states
Total value of acquisitions of goods and related costs excluding any VAT, from other EC
BOX 9
member states

In case you were using electronic submission of VAT Return via FOTV transaction (based on configuration in
transactions OBCH/OBCG) this can be reused.

There are two options how to proceed:

a. Execute transaction S_ALR_87009903 or program RF_STEUERINFO in transaction SE38, beside

Country and Chart of account define also Tax Grouping Version used for FOTV. Program in addition
shows for each tax code also tax groups defined in OBCH/OBCG.

b. Call transaction se16 for tables T007L (tax groups) and T007K (tax base groups) and let the system to
show you table entries for country GB and Tax Grouping Version used in FOTV.

Existing groups shall correspond to Tax Groups defined in VG_CUST. Entries from OBCG serve for Tax
boxes defined as Tax Box Output Type = Tax Base. Entries from OBCH serve for Tax boxes defined as Tax
Box Output Type = Tax Amount.

PHASE 2 - Tax Box Structure definition

1. Call transaction SM34 and start maintenance mode for cluster view VG_CUST. On S4HANA you might
also follow IMG path: Financial Accounting (New) -> Advanced Compliance Reporting -> Define Tax Box
Structure

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2. Create new Tax Box Structure entry:

Country: enter country key GB

From date: enter starting date as of which structure is used e.g. 01.01.2019

Tax Box Structure Type: <leave empty>

Tax Box Structure Name: enter any name e.g. MTD_VAT_UK

Tax box Structure Description: enter any description e.g. VAT UK Tax box structure

3. Mark newly created Tax Box Structure and navigate to Define Tax Groups node. Use your mapping table
from Phase 1, point 3 and enter group from corresponding mapping Tax code. You only need to fill Tax
Group, Tax Code and Transaction, other fields does not need to be defined in most cases.

For example your tax code ZZ corresponds to tax code A1 and your calculation procedure shows transaction
MWS defined for this tax code. Than your entry will be like this:

Tax Group: 1, Tax Code: ZZ, Transaction: MWS (balance, document type, sp G/L ind, account group,
percentage and Arithmetic operation leave empty)

Tax rate Description (only informative for mapping not part of

Tax Group Tax Code Transaction
VG_CUST Tax Group)
1 A1 MWS Standard rated output VAT: 20 %
1 A6 MWS Reduced rated output VAT: 5 %
1 V4 MWS (ESA) Acquisition of services within the EC
1 V5 MWS (ESA) Subcontracting within EU
1 VA MWS Acquisition of services outside of the EU
2 V3 MWS (ESA) Acquisition of goods within EC
4 V1 VST Standard rated input VAT: 20 %
4 V3 VST (ESE) Acquisition of goods within EC
4 V4 VST (ESE) Acquisition of services within the EC
4 V5 VST (ESE) Subcontracting within EU
4 V6 VST Reduced rated input VAT: 5 %
4 V7 VST Input VAT: 20% - 50% non-deductible (allocated)
4 V8 VST Input VAT: 20% - 50% non-deductible (not alloc.)
4 VA VST Acquisition of services outside of the EU
6 A0 MWS Exempt from output VAT
6 A1 MWS Standard rated output VAT: 20 %
6 A3 MWS Delivery of goods within EC
6 A4 MWS Delivery of Services within the EC
6 A5 MWS Subcontracting within EU
6 A6 MWS Reduced rated output VAT: 5 %
6 A7 MWS 0% Rated Output VAT
6 V5 MWS (ESA) Subcontracting within EU
6 VA MWS Acquisition of services outside of the EU
6 Y0 MWS Outside the scope of VAT: Output
6 Y1 MWS Outside the scope of VAT: Output Notice 741a
6 V4 MWS (ESA) Acquisition of services within the EC
7 V0 VST Exempt from input VAT
7 V1 VST Standard rated input VAT: 20 %
7 V2 NVV Standard rated, nondeductible VAT: 20 %

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7 V3 VST (ESE) Acquisition of goods within EC
7 V4 VST (ESE) Acquisition of services within the EC
7 V5 VST (ESE) Subcontracting within EU
7 V6 VST Reduced rated input VAT: 5 %
7 V7 VST Input VAT: 20% - 50% non-deductible (allocated)
7 V8 VST Input VAT: 20% - 50% non-deductible (not alloc.)
7 V9 VST 0% Rated Input Tax
7 VA VST Acquisition of services outside of the EU
7 X0 VST Outside the scope of VAT: Input
8 A3 MWS Delivery of goods within EC
9 V3 VST (ESE) Acquisition of goods within EC

Note: VG_CUST customizing supports more criteria (columns) than are described here. If you don’t have any
specific business requirement you can leave the rest empty.

Pivot view :

Tax Code Transaction Tax Group

A0 MWS 6
A1 MWS 1,6
A3 MWS 6,8
A4 MWS 6
A5 MWS 6
A6 MWS 1,6
A7 MWS 6
V0 VST 7
V1 VST 4,7
V2 NVV 7
V3 MWS (ESA) 2
V3 VST (ESE) 4,7,9
V4 MWS (ESA) 1,6
V4 VST (ESE) 4,7
V5 MWS (ESA) 1,6
V5 VST (ESE) 4,7
V6 VST 4,7
V7 VST 4,7
V8 VST 4,7
V9 VST 7
VA MWS 1,6
VA VST 4,7
X0 VST 7
Y0 MWS 6

Note: In case of hard (i.e. no deal) Brexit new tax codes might be introduced and need to be properly

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assigned. Also some existing might be subject of the reassignment or removal from current assignment.

4. Define tax boxes - Navigate to Tax Boxes node. Create following entries (Tax Box and Name) simply by
Copy and Paste from this table. Assign respective Tax Box Output Type according this table.

Note: boxes 03 and 05 are calculated tax boxes they shall not be defined.

Tax Box
Tax Box Name
Output Type
01 VAT due on sales and other outputs Tax Amount
02 VAT due on acquisitions from other EC Member State Tax Amount
04 VAT reclaimed on purchases and other inputs Tax Amount
06 Total value of sales and all other outputs Tax Base
07 Total value of purchases and all other inputs Tax Base
08 Total value of all supplies of goods and rel. cost Tax Base
09 Total value of acquisitions of goods and rel. cost Tax Base

Note: In case of hard (i.e. no deal) Brexit description of following tax boxes will need to be chaged as follows:

Box number New description

02 VAT due in this period on imports accounted for through postponed accounting
04 VAT reclaimed in this period on purchases and other inputs (including imports)
08 Total value of all exports of goods, excluding any VAT
09 Total value of all imports of goods, excluding any VAT

You can find recent updates to Tax Box Description in note 3034766.

5. Navigate to Assign Tax Groups to Tax Boxes node. Assign already created Tax Boxes and Tax Groups
one to one each other.

Tax Box Tax Group

01 1
02 2
04 4
06 6
07 7
08 8
09 9

IMPORTANT NOTE : not all fields available in VG_CUST configuration can be used for GB VAT
configuration.

Usage of those fields in configuration is optional whereas use of Tax Code (MWSKZ) is mandatory:

- Tax code (MWSKZ) - mandatory use

- Transaction Key (KTOSL) - optional use

- D/C Balance (SHKZG_UMSV) - optional use

- Document Type (BLART) - optional use

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- Account Group (KTOKK) - optional use

SAP recommends to configure on the Tax Group level only Tax code (MWSKZ) and Transaction Key
(KTOSL) as described above in template configuration.

Other Components

Component Description

XX-CSC-GB Great Britain

This document refers to

SAP Note/KBA Title

3034766 GB: Change to the description of box 2, 4, 8, and 9 of UK VAT return

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