Processing Object-based Tax

FACTS allow you to freely define a set of data that is part of the contract object. This data can be defined as time dependant and can be used by the Business Rule Framework (BRFplus) for tax calculation and validation. Define and create the fact of the contract object is the prerequisite to use object-based tax because billing related attributes are defined in the FACTS.

The FACTS including the following elements:

• Fact Categories:
  • Fact categories are the smallest entity of meaningful information to describe a piece of data such as a simple type in the SAP data dictionary.
  • Once categories are grouped in a Fact Type, they will be contextualized in a business environment.
  • The qualifier represents a piece of data that completes the meaning of the data, for example theUnit of Measure or the currency or maybe the type of business partner.
  • All tables are client-dependent.
  • Customers can include their own fields using include CI_FACTS_FIELD_DESC in the structure PSFACTS_FIELD_DESCRIPTORS.
  • For example, Street, Town could be two fact categories.
• Fact Type:
  • A fact type is a collection of Fact Categories encapsulating data in a meaningful business context.
  • Each fact type contains information that is relevant for a certain aspect of taxation of an object.
  • For example, fact type Address could include the fact category Street and Town.
• Fact Set:
  • With fact sets you are able to control the data entry on the editing screen of the contract object.
  • One fact set is assigned to a Contract Object Type.
  • You assign at least one fact type to each fact set. Each fact type contains information that is relevant for the taxation of a certain type of object. Furthermore, you also assign a revenue type to the fact set to specify which kind of revenue is expected for this fact set.
  • For example, a fact set location could include fact type Address and Employers.

SAP delivers standard fact type BILL. The fact type BILL comprises business partner, contract account, contract object, and percentage. The fact type BILL is necessary for object-based taxes if the check to bill fact type is not switched off in the configuration. This fact type can prevent the multiple billing of contract objects that are assigned to several business partners and contract accounts. If contract objects should be billed proportionally for different business partners and contract accounts, you must enter the relevant percentages. Note that the proportional distribution is not performed automatically and the fact values must be evaluated in the rules engine.

The example of using BILL. A contract is assigned to business partners 1, 2, and 3. Facts are defined for the contract object in the contract account data with the BILL fact type for business partners 1 and 2. This means that business partner 3 is not included in the billing. The percentages that you enter for business partners 1 and 2 have to add up to 100%. The combination 100% + 0% = 100% is allowed. The percentage 0% means that the business partner can be billed using the BRF, but factor 0% can be included in the calculation of the amounts.

Configuration path to switch off BILL Fact type check: Financial accounting → Contract Accounts Receivable and Payable → Business Transactions → Public Sector Tax Assessment → Billing → Switch Off Check on Fact Type BILL.

Billing execution can be done for individual taxpayers online or on a mass billing run. Both options allow the usage of simulation, but only on online the option to display BRF trace is enabled.

Transaction FMCABILLI is used to create a billing document for a object-based tax of a specific taxpayer. You can also find this transaction in the SAP Menu: Accounting → Financial Accounting → Contract Accounts Receivable and Payable → Tax Assessment → Create Billing Documents for Object-Based Taxes (Individually).

It is required to specify at least the business partner and period key.

It has the following billing options:

• Billing without adjustment: bill taxes that have not been billed yet.
• Billing with adjustment: bill taxes that were billed previously but it has master data changes which can impact the calculation due amount. When the master data is updated, the entry will be created in the trigger table DPSOB_BILLTRIG. When the adjusted billing document is created, the entry in the trigger table will be removed.
• Simulated billing document: only generate the simulation billing document.

It has the following invoicing options:

• No invoicing document: do not create an invoice document
• Invoicing and posting document: create invoice document and PSCD document if billing document is created successfully.
• Simulated invoicing document: create simulation invoicing document if billing document is created successfully.

It has the following assessment printout options:

• No assessment printout: do not print out an assessment notice.
• Assessment printout: print assessment notice in smart form format.
• PDF document of assessment: print assessment notice in PDF format.
• Simulate assessment printout: only simulate assessment printout.

It displays BRFplus lean trace and execute in simulation mode.

The program Object-Based Tax (FMCABILLM) in Parallel Run is a mass activity, that is able to create billing documents or simulated billing documents for various business partners, contract accounts or contract objects. It also only allows the creation of billing orders. You can find the transaction in SAP menu: Accounting → Financial Accounting → Contract Accounts Receivable and Payable → Tax Assessment → Create Billing Documents for Object-Based Taxes (in Parallel).

If facts data is changed and a re-calculation is required a billing order is created. In PSCD event P350 you can derive the revenue type for the billing order. If a revenue type is relevant for multiple contract object types, then you can create an individual billing order per revenue type. As a template function module FMCA_EVENT_P350 is provided. In the mass activity for object-based taxes you can run billing for billing order only.

Invoicing process can be initiated together with the billing or standalone for the existing billing documents. It can be processed online, in mass run or in parallel run for performance optimization. The generated billing documents are ready to be invoiced if the option to run it together with the billing process was not activated. For each of the available billing documents, an invoicing order is created and will be consumed at invoicing execution. This will assure that through the status management one billing document is invoiced only once. Similar to the billing process, the invoicing can be executed individually by transaction FKKINV_S, executed in mass run by transaction FKKINV_M and executed in parallel processing by transaction FKKINV_MA.

You can find the individual invoicing transaction in the SAP Menu: Accounting → Financial Accounting → Contract Accounts Receivable and Payable → Convergent Invoicing → Invoicing Documents → Create.

You can find the mass run or parallel run in SAP Menu: Accounting → Financial Accounting → Contract Accounts Receivable and Payable → Convergent Invoicing → Periodic Processing → Invoicing → Execute Invoicing or Execute Invoicing (Parallel Processing).

This slide summarizes the options to process object-based taxes for the single execution of billing and invoicing.

This slide summarizes the options to process object-based taxes for the mass execution of billing and invoicing.

Once a taxpayer has been billed for a specific tax object, period and revenue type, changes of tax data may happen that impact the calculation of the tax. The tax authority then has to re-calculate the amount due and possibly generate adjustments, which result in a debit or credit to the initially calculated taxpayer's liability. A tax notice for adjustment usually also has to be sent to the taxpayer.

When the recalculation leads to an adjustment, there may be two existing scenarios when the adjustment billing document is posted:

• Only the billing document of the original tax calculation exists, no invoicing document (therefore no PSCD document)
  • A new billing document will then be created.
  • The original billing document is marked as obsolete.
  • Only the latest billing document will be considered in invoicing.
• There's a billing document, an invoicing document and a PSCD document corresponding to the original tax calculation
  • An adjustment billing document will be created.
  • An adjustment reference is stored at the header level of the document.
  • New documents will be created in invoicing with reference to the original/predecessor documents.