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Using Preference Determination in the Export Process

<div id="content"><p tabindex="0">Whenever you perform preference determination for a product in SAP GTS, the system checks the preferential agreements to determine if, and under which conditions, this product can be sold as an originating product of the exporting country or — in the case of the EU — country group. These checks can only be performed for products that have a bill of materials (BOM). In SAP GTS, you can also carry out preference determination for configurable materials.</p><div class="kalturaVideoLessonWrapper"><div aria-label="Preference Determination in SAP GTS" class="kalturaVideoLessonContainer" data-testid="video" id="1_k6b17h4p"></div></div><p tabindex="0">The system stores the preference determination result in the product master. If there are value clauses, it applies the minimum Ex Works price established during preference determination. If the change of heading or specific production procedures have been checked successfully, the system applies the smallest possible numerical value field.</p></div>

Preference Determination in SAP GTS

<div id="content"><p tabindex="0">Once preference determination has been completed successfully, the SAP GTS system sets a corresponding <span class="nobreak">preference indicator</span> in the product for which preference determination was performed.</p><div class="kalturaVideoLessonWrapper"><div aria-label="Retransfer of Preferential Status Information" class="kalturaVideoLessonContainer" data-testid="video" id="1_oideai8p"></div></div><p tabindex="0">If the comparison of the preference determination result with the actual Ex Works price reveals that the actual Ex Works price is too low to claim preferential origin status for the goods being exported, you can use the preference determination details to check for which non-originating materials, if any, it is worth requesting a supplier’s declaration. If vendors or manufacturers confirm that their products have preferential origin status, the total value of non-originating materials will be lower in future preference determinations and the minimum Ex Works price of the final product being exported will be reduced as a consequence.</p></div>

Preference Indicator

Discovering the Basics of SAP Global Trade Services

Preference_Determination.mp4

To perform preference determination, SAP GTS requires the HS chapter, heading or subheading of the product to be exported. All products for which preference determination is to be performed must therefore be classified. Using the chapter, the heading, or the subheading, the system determines the relevant rules of origin from the preferential agreements on which preference determination is to be based. The system then explodes the product's bill of material to identify the non-originating materials and apply the rules of origin to these materials. In SAP GTS, non-originating materials are all components in the bill of material that are externally procured or of mixed origin and that do not have a valid supplier's declaration. With a supplier's declaration, vendors or manufacturers certify that the products they are delivering are originating products based on one or several preferential agreements. Components produced in-house may be included as originating materials in preference determination for the final product, only if a preference determination has been carried out for these components. If the relevant rule of origin contains a value clause, the system calculates a minimum ex-works price or threshold value for the finished product. If the product is sold for no less than this price to a customer in the state signatory to the respective preferential agreement, it is considered an originating product and can be imported at the preferential duty rate, provided that a proof of origin is included.

Retransfer_Preference_Status.mp4

If you transfer a sales or billing document from the SAP ECC or SAP S/4HANA feeder system, the SAP GTS system checks the replica and compares the threshold value specified in the master data of the product to be exported with the net value of the export document or customs declaration item. If the net value is equal to or greater than the threshold value, the SAP GTS system identifies the document item as being entitled to preferential treatment. SAP GTS can retransfer the result of price comparison to the SAP ECC or SAP S/4HANA feeder system on a document-by-document basis. This function does not require a transfer of the feeder system documents to SAP GTS. SAP ECC and SAP S/4HANA use a preference indicator in the item of the sales and billing document to flag the materials to be exported as originating products. The preference indicator determines whether you can issue a proof of origin from the feeder system or from SAP GTS. You can use the preference indicator in the feeder system when printing the commercial invoice to include the wording of the invoice declaration for billing document items entitled to preferential treatment.