Mexican Localization Eagle industry Co.,Ltd.

Transcription

1 Mexican Localization Eagle industry Co.,Ltd. Francisco Cabrales Romero- Sr FI CO Consultant. SAP Consulting July 26th, 2013

2 Topics Localizations History Financials Sales & Distribution Materials Mangement Tools Accounting Records on possible scenarios in your Mexican operation.

3 Localization México SAP has localized the system to fulfill the main legal and business requirements in Mexico. Whenever a change in the law or business practice affects any of this functionality already available, SAP is responsible to do the modifications to fulfill the new requirements (i.e change in the law, new report format, new certificate format, new bank format, etc ). The localization covers requirements in the Financials module (FI), the Sales and Distribution module (SD) and the Material management module (MM), Human Resources (HR).

4 History Name Eagle Industry Co., Ltd. Established October 1, 1964 Representative Tetsuji Tsuru; Representative Director, President Offices EKK Eagle Industry Mexico S.A. de C.V. URL Business Year From April 1 to March 31 of the following year Number of Employees 4,844 Business Outline Main Banks Public Auditing Firm Manufacturing and marketing of mechanical seals, special valves, plant devices, marine-related products, bellows devices; and related installation work Sumitomo Mitsui Banking Corporation The Bank of Tokyo-Mitsubishi UFJ, Ltd. Mizuho Corporate Bank, Ltd. The Chugoku Bank, Limited Nihombashi Corporation Certified Public Accountants Supposed SAP Solution Value prototyping with SAP Best Practices for subsidiary integration in one client and Automotive solution for parts supplier.

5 Financials Mexico Localizacion Chart of Accounts Taxes: VAT (IVA) IEPS Income Tax (ISR) IETU Deferred Tax Withholding Taxes Fixed Assets Inflation Calculation ISR Depreciation Reports (System Information) Standard Legal Information System Third Party Operation s Tax Declaration (Formato A-29 - DIOT) Income and Expenses Reports to determine the IETU s Base Amount Predetermined bank payment formats for payment program Master Data Vendor/Customer

6 Financials ML: Chart of Accounts Chart of Accounts It is possible to define the Chart of Account with the accounts required in Mexico. In Mexico all company codes are obliged to register the Fiscal Net Income in a specific account which will be added or deducted by the following concepts: Fiscal Net Income amount of the Previous Fiscal Year Incomes, dividends or investments made in foreign territories with tax preferment rates. Dividends received from company codes located in Mexico Dividends or net incomes according to article 89th of the LISR (Ley del Income Tax). There s no legal restriction in the mexican legislation regarding the length in digits in the standard ERP system.

7 Financials ML: TAXES VAT (IVA) In Mexico Company Codes are obliged to pay the corresponding V.A.T. in the terms described in article 1 of the Mexican V.A.T. law (LIVA - Ley del Impuesto al Valor Agregado). Every company code with a fiscal address in Mexico must register, report and pay the VAT when: sell or buy goods sell or buy services (intangible goods) Provide temporary goods or services usage Goods and Service Imports V.A.T. Rates in Mexico 16% - general tax rate 11% - tax rate 0% - tax rate

8 SAP Tax Code Configuration Input VAT Tax code Tax rate (%) V0 0 % V1 11 % V2 16 % Output VAT Tax code Tax rate (%) A0 0 % A1 11 % A2 16 %

9 Financials ML: TAXES IEPS Not applicable for EAGLE Excise duty, in the form of a special tax on production and services ( Impuesto Especial Sobre Producción y Servicios ), is levied at each stage in the production of alcoholic drinks, tobacco products, and oil products. There are different rates of excise duty for different products. It is applied in addition to VAT, but is calculated on the basis of the net price. All alcoholic beverages sold in Mexico are subject to Mexico s 16% value added tax (VAT). In addition, alcoholic beverages, tobacco, and denatured alcohol are also subject to the Impuesto Especial de Productos y Servicios or IEPS (Special Tax on Products and Services). See below for tax rates. Commodity IEPS (Special Tax) Beverage with alcohol content up to 14% 25% Beverage with alcohol content above 14% and up to 20% 30% Beverage with alcohol content above 20% 50% Denatured alcohol 50% Cigarettes 160% Cigars and other tobacco 160% Handmade cigars and other such tobacco 30.4%

10 Financials ML: TAXES ISR The Income Tax (ISR) in Mexico is a direct tax on income. The current law on income tax came into force on 1 January 2002, repealing the law had been in force since 1 January The tax is caused by exercise and make provisional monthly payments on account of annual tax returns must submit monthly interim payments made, and an annual statement, which must occur three or four months after the fiscal year end as question of moral or physical person. For the wages earned by providing a background service. Professional activities. For the lease or use of property. In the interest you get. For the prizes you get. For the dividends and profits to divide other corporations. For the sale or purchase of goods

11 Financials ML: TAXES IETU According with article #1 of the Ley del impuesto empresarial a Tasa Vigente, all the physical people with enterprise activity or intermediate regime, and the companies in national territory, as well as the residents abroad with permanent establishment in the country by the income that they obtain, are forced to the payment of the enterprise tax to unique rate, by the accomplishment of the following activities: Rate Disposition of property Benefit of independent services Granting of the use or temporary enjoyment of goods and services % % 2010 and forward 17.5 IETU amount, will be the amount that we obtained as income (gain by sale of or or service), the less the deductions, and that is according to right, giving a result that will multiply by Sap develops 2 standard reports that we will review later, to obtained the amounts for incomes and expenses to determine IETU s base amount

12 Financials ML: TAXES Deferred Tax According to the Mexican tax legislation 2002, VAT/IEPS taxes are not reported to the tax office when the invoice is received; instead, they are reported at the moment of the payment. Hence, it is possible that the tax calculated in a document is posted to an offsetting account. With standard program RFUMSV25 the tax amount is transfered automaticaly to the final account. In order to be able to cover this requirement, it is counted on the functionality of the DEFERRED TAXES This functionality requires of: Codes of normal as well as deferred taxes. Accounts of taxes as much for the normal ones as for differed that uses accounts bridge Import and clearing of the Banking Statement of account, in case it is wanted to make the validation at the time of the payment in cash Execution of the Program of Transfer of Taxes in order month. SAP Notes & Programs For Customers up to 4.7, the RFUMSV25 is available for this requirement. For customers on ERP 2005 of higher, the RFUMSV50 should be used instead. OSS NOTE VAT tax handling Mexico (IVA pago efectivo) OSS NOTE RFUMSV25: Check bank clearing for Mexico OSS NOTE RFUMSV25 and additional Tax

13 Financials ML: TAXES Posting Deferred Tax 1-. Invoice Creation Acc. payable Expenses Deferred Tax Enter Payment: NOTHING changes here Acc. payable Bank Account Transfer Deferred Tax Program is executed: A posting document is created Deferred Tax Target Tax Account The tax reported to the Tax Authorities is the one that you have in the "Normal" Tax Account at the end of the month

14 Financials ML: TAXES Witholding Taxes Withholding taxes were developed in Mexico as a tool for the tax authorities to fight against tax evasion In some countries like Mexico, the law provides that invoice or payment recipients must withhold a certain portion of the invoice amount and pay this as withholding tax on behalf of the vendor or customer. In Mexico, withholding tax is needed to be posted and reported to the tax authorities at regular intervals for certain vendors and customers, such as self-employed people. The way in which withholding tax is calculated depends on type of service. Transactions may: Have a variable base for tax/si contributions Have different tax rates Not be withholding tax-relevant Rates Tax Withholding VAT Withholding Income tax Description TAXRATE Description TAXRATE Fees and leasing 10.0% Fees and leasing 10.0% Freights retention 4.0% Royalties 15.0%

15 Financials ML: TAXES Example of Witholding Taxes Freelancer s invoice: 1,000 Gross Amount 150 VAT tax (15%) ,150 Total Amount of the invoice. The company who pays the freelancer have to withhold: 10% of income tax (calculated on the gross amount) 2/3 of the VAT amount (of the invoice) The amount to be paid is: 1,150 Invoice Total ( 10% Income tax of 1,000) ( 2/3 of the VAT amount 150) ,095 Amount to be paid to the freelancer

16 Financials ML: TAXES OSS for Witholding Taxes Income and/or VAT taxes can be withheld (ISR and IVA) at the payment time as required in Mexico Program RFIDYYWT The Constancia de Retención is generated according to the 37A format OSS note: Mexico: RFKQST00 withholding tax ISR and VAT(IVA) ISR withholding tax for Mexico

17 Format Constancia de Retención 37A format

18 Financials ML: Fixed Assets Fixed Assets Depreciation: It is possible to define the different depreciation methods required for accounting and fiscal depreciation calculations. Principally 5 depreciation areas cover the Mexican legislation; the others are used for information of historical value Area Name 01 Book Value 03 B Tax 16 ISR 18 IMPAC

19 Financials ML: Fixed Assets Inflation Managment: The system counts on the functionality that allows to realize the calculations of inflation according to the defined thing in the B-10 Bolletin As of January 2008, is no longer required to realize the calculation of the inflation, the functionality follows available, in case one becomes to activate this requirement The functionality consists on: Global customizing Inflation indexes definition for Mexico Inflation Indexes values It is only supported for the legal requirements for certain countries It has to be customized for FI-GL and FI-AA modules Revaluation in G/L accounts and fixed asset accounts is carried out with their specific standard programs

20 Financials ML: Fixed Assets ISR Depreciation: Depreciation calculation is according to the Income Tax (ISR) rules in the Asset Accounting module (FI-AA) In the OSS note: there is a program that realizes calculation of the Update of depreciation for the I.S.R. The program calculates the amounts according to the rules defined in the law of the I.S.R. The calculated values are entered in the aid of Fixed Assets in an area of specific depreciation for the I.S.R. If it is desired, also it is possible to enter the amounts calculated in statistical accounts in the accounting module.

21 Financials ML: Reports (System Information) Standard Legal Information System: The system includes the Financial Statements (Balance Sheet and Profit and Loss), VAT and Withholdings reports, Tax Certificates (Deferred Tax and Withheld Tax), Top customers and Top vendors reports ( formulario 42) Third Party Operation s Tax Declaration (Formato A-29 - DIOT): This report is available in OSS Note: It allows generating the output file with the required format defined by the Tax authorities. OSS Note DIOT report: Issue with user-exit Income and Expenses Reports to determine the IETU s Base Amount: Note New Flat Tax (reffered to as "IETU") in Mexico. Both reports display all the payments and their details within a period so the company can determine the transactions that have to be included in the IETU s base amount. The Income Tax Report is available in OSS and the Expenses Tax Report in OSS Predetermined bank payment formats for payment program: Payroll format for Santander Vendors Payments and Payroll formats for BANK (Formato C), last version in OSS note SAPs scrpit- F110_MX_CHEQUE

22 Financials ML: Master Data Vendor & Customer Tax Number in Customers and Vendors: There are two tax numbers in Mexico that are relevant to the SAP System, the RFC number and the CURP number. RFC number (Registro Federal de Contribuyentes): A tax number, in Mexico, assigned to legal persons. All legal persons must have an RFC number that identifies them for legal tasks. The structure of this number is different between each type of person. Companies: 12 character Person: 13 character. It contains its first letterof it s name, last name, its birthday date and 3 character that it is call homoclave CURP number (Cédula de Identificación Fiscal con Clave Única de Registro de Población): A tax number, in Mexico, assigned to natural persons. Customizing Maintain your own RFC numbers in Customizing Financial Accounting (FI) Financial Accounting Global Settings Company Code Enter Global Parameters.

23 Sales & Distribution ML: Number range in S&D documents Legal Number Documents There are 2 different types of legal documents in Sales and Distribution module: 1. Invoice 2. Credit Memos This documents can be Pre-numbered forms: (OSS Note ): It the company is not self-printer it is possible to control the external folio number for the official documents (invoices, Credit Memos) automatically in SAP. Digital Invoices and Credit Memos: The functionality to issue the Electronic Invoices according to the rules defined in the Anexo 20 of the law. Please refer to OSS notes: and Each type of document has it own range of number.

24 Sales & Distribution ML: Digital Invoices &Credit Memos Digital Invoices & Credit Memos From January 1th 2011 all invoices with amount greater than $2,000.00MXP must be issued digitally according with the requirements of Comprobantes Fiscales Digitales (CFD) a.k.a. Digital Invoices. Types of issue authorized by SAT (legal entity) Contributors that issue Digital Invoices using an Authorized Third Party Systems Contributors that issue Digital Invoices using their own Systems Obligations of Issue and Reception of Digital Invoices ISSUE Report monthly to SAT all the information about the Digital Invoices issued Keep in electronics medias all the Digital Invoices and provide to the authorities a way to consults its. Issue Global Digital Invoices to the General Public Sales operations (using the Generic RFC XAXX ) Issue Digital Invoices to foreign citizens using the Generic RFC XAXX RECEPTION Keep in electronics medias the received Digital Invoices and provide to the authorities a way to consults its. Check the digital seal of every Digital Invoice received (using the SAT methods for this).

25 Sales & Distribution ML: Digital Invoices &Credit Memos Requisite for Digital Invoices Obtain the FIEL (FirmaElectrónicaAvanzada) Obtain the Digital Seal from SAT (LegalAuthority) Request at least one numbering series and prefix. Ful fill the technologic standard provided by SAT to create the XMLfile, according to Annex 20 of the Resolución Miscelanea Fiscal of Create and send the monthly report to SAT SAP Notes SAP Note Digital Invoice Mexico: IDoc basic type INVOIC02 Extension SAP Note Digital Invoice Mexico: CFD 2.2 SAP Note Digital Invoice Mexico: IDoc basic type FIDCCP02 Extension

26 Sales & Distribution ML: Digital Invoices &Credit Memos Conceptual Design of the solution

27 SCOPE of Functionality

28 Asignation of PreFix and series Number into the SD / FI Documents Scope of functionallity: ISSUE Numbering control of PreFix and Series number provided by SAT at header level. Creation of the Original Chain (Cadena Original) according to legal requirements. Capacity of creation of Addendas and Complements. Digital seal in every billing document issues from SD or FI module. Digital Invoices available in the system for internal or external audit processes. Information in the system for print or re-print each documents. Month report according with the SAT requirements. Creation of XML file from PI according to the SAT requirements. Creation of the PDF file (image of the Billing document) Commercial Addendas and complements

29 Asignation of PreFix and series Number into the SD / FI Documents

30 Example of XML The XML file is Generated from SAP PI.

31 Billing Printed

32 Monthly Report

33 Materials Management Inflation calculation (OSS note: and ): According to the B-10 definition, it is possible to calculate the inflation for the Stock and the Goods Issues in the Material Management module.

34 Tools for generating different government formats Tools for generating different government formats: Data Medium Exchange Engine = DMEE: This is a standard tool that allows generate output files with any format required. It is generally used to generate bank payment transfer files, bank account statements import and could be also used for taxes purposes too. Data Retention Tool = DART (standard): This tool allows transfer to data medium for tax audit purposes

35 Accounting Records on possible scenarios in your Mexican operation. (Example)

36 Accounting Records on possible scenarios in your Mexican operation.(example)