VAT Reporting for Italy

Transcription

1 ERP CLOUD VAT Reporting for Italy Oracle Financials for EMEA Table of Contents 1. Purpose of this document Assumptions and Prerequisites Common Setup... 5 Tax Reporting Configuration... 5 Tax Regime... 5 Legal Reporting Unit Tax Registration... 6 Tax Reporting Configuration Setup... 7 Tax Registers... 8 Tax Specific Setup Tax Reporting Types and Codes Tax Rates Tax Determining Factors Usage Classification Categories Party Fiscal Classifications Transaction-Based Fiscal Classifications Third-Party Tax Profiles Tax Rules Taxable Basis Rule Tax Rate Rules Transaction Entry in Payables Sequencing: Voucher Number

2 Specific Invoices Entry Invoices with the deferred tax Validating, Accounting and Posting Transaction Entry in Receivables Sequencing: Document Number Transactions with the deferred tax Completing, Accounting and Posting Reporting Business Flow Summary Selection Process Subledgers activity reporting Purchase VAT Register for Italy Payables Sales VAT Register (Self Invoices, EEC VAT) for Italy Receivables Sales VAT Register for Italy Declarable tax activity reporting Declarable Input VAT Register for Italy Declarable Output VAT Register for Italy VAT Liquidation Report for Italy Finalize Transactions for Tax Reporting Declarable tax activity reporting restrictions and recommendations of Usage Review periods statuses and reprint reports

3 1. Purpose of this document This document explains the implementation and usage guide lines for the following two subsets of VAT reports for Italy: The subset of the reports categorized as subledger (Payables/Receivables) activity reporting is to support periodic VAT reporting in Italy and includes the following reports: - Purchase VAT Register for Italy - Payables Sales VAT Register (Self Invoices, Inter-EU VAT) for Italy - Receivables Sales VAT Register for Italy The objective of these reports is to show all invoicing activity - to list all invoices issued/received in a given period, irrespective of when the tax is declarable to the tax authorities. These reports are legal and are provided to the tax authorities upon request. This subset of reports categorized as declarable tax activity reporting is to support periodic VAT liquidation in Italy and includes the following reports: - Declarable Input VAT Register for Italy - Declarable Output VAT Register for - VAT liquidation Report for Italy VAT liquidation is VAT calculation and settlement with the tax authorities. The VAT Liquidation Report for Italy is not a legal report. It is a supporting report for the VAT Liquidation calculation. It allows users to calculate the VAT due or VAT Credit at the end of the period. Declarable Input and Output VAT Registers are not legal, but are required to support VAT Liquidation audit. The document explains the pre-requisite setup, important transaction entry aspects, report output details and the business flow. 3

4 2. Assumptions and Prerequisites In this document, the following entities are assumed to have already been set up: Data Security Refer to the Fusion Security topical essay available on cloud.oracle.com Geographies Enterprise Structure Tax Regime to Rate setup Tax Party Profiles Tax Rules Suppliers Customers Procurement Business Function Common Options for Oracle Payables and Oracle Receivables It is recommended that the Implementation Project is complete for your organization before commencing the Feature Specific Setup outlined below. If you require further details, refer to the Analyze and Report section of Oracle Financials Cloud (Get Started) web site. 4

5 3. Common Setup The setup for Italy can be conditionally divided in two major parts: common setup and specific setup. The common setup pertains to the entire VAT reporting for Italy. Common Implementation Steps: 1 Tax Reporting Configuration 1.1 Tax Regime 1.2 Legal Reporting Unit Tax Registration 1.3 Tax Reporting Configuration Setup 1.4 Tax Registers 2 Tax Tax Reporting Configuration Define the Tax Reporting Configuration to start using the VAT Reports for Italy. The Tax Reporting Configuration determines a reporting configuration based on the Tax Registration Number (TRN) defined for Legal Reporting Unit tax registration and is a basis for country-specific tax reporting. This configuration is referred to as the Tax Reporting Entity. Each Tax Reporting Entity is uniquely identified by entity identifier and is a combination of the Legal Entity, Tax Registration Number and Tax Regime. Tax Regime Task name: Manage Tax Regimes Navigation: Navigator > Setup and Maintenance -> Manage Tax Regimes Enable Use tax reporting configuration check box at the Tax Regime level. This enables the Tax Reporting Configuration tab on the Create/Edit Legal Reporting Unit Tax Registration page. 5

6 Legal Reporting Unit Tax Registration Task name: Manage Tax Registrations Navigation: Navigator > Setup and Maintenance -> Manage Tax Registrations-> Search for: Legal Reporting Unit Tax Profile ->Tax Registrations Tax Reporting Configuration is a part of the Legal Reporting Unit Tax Registration setup flow. Create legal reporting unit tax registration with the Registration Number. Tax Registration Number is a mandatory component of the Tax Reporting Configuration. When the Registration Number is entered the Tax Reporting Configuration tab becomes enabled. 6

7 Tax Reporting Configuration Setup Task name: Manage Tax Registrations Navigation: Tax Reporting Configuration tab -> Common Configuration tab To create the Tax Reporting Configuration: Enter Tax Calendar. You define the tax calendar as standard accounting calendar using Manage Accounting Calendars page. Create separate tax calendar for tax reporting configuration setup. Do not use the same accounting calendar for both tax reporting and accounting purposes. Enable tax registers. VAT Reporting for Italy is based on the tax registers. You must define at least one tax register when you enable this checkbox. 7

8 Tax Registers Task name: Manage Tax Registrations Navigation: Tax Reporting Configuration -> Tax Registers tab To associate Tax Registers you have to define previously Document Sequences (see Sequencing by Legal Entity or Ledger Topical Essay for the details on how to setup document sequencing). Associate tax registers with the Tax Reporting Configuration. You must assign at least one document sequence to each tax register. For example, if the Purchase VAT Register for Italy should be run for tax register that includes Standard Invoices, Credit Memos, Debit Memos and Prepayment Invoices and these documents are sequenced with the same sequence then define the tax register and assign the sequence defined for Standard Invoices, Credit Memos, Debit Memos and Prepayment Invoices. 8

9 There are five seeded tax register types intended to run the following reports: Tax Register Type Purchase VAT Sales VAT Sales (Self Invoice and EU VAT) Declarable Input VAT Declarable Output VAT Report Purchase VAT Register for Italy Receivables Sales VAT Registers for Italy Payables Sales VAT Register (Self Invoice and EU VAT) for Italy Purchase VAT Register for Italy Declarable Input VAT Register for Italy Declarable Output VAT Register for Italy When you run a report for a specific register, the report logic checks document sequence name associated with this register and reports only transactions sequenced with this document sequence. Only sequenced transactions are reported in VAT reports for Italy. Create one tax register for each tax register type you intend to use. For example, create tax register for Registro IVA CEE Vendite 2008 for Intra-EU invoices to run the Payables Sales VAT Register (Self Invoice and EU VAT) for Italy for the period in the year 2008: Create the following tax registers (with the corresponding tax register types) to report on Intra-EU VAT properly (Separate tax register must be created to report on self-assessed tax liability as output VAT): Tax Register Name Tax Register Type Sequence assignment example To be reported in the report 9

10 Registro IVA CEE Vendite 2008 Declarable Registro IVA CEE Acquisti 2008 Declarable Registro Self-assessed 2008 Sales (self invoice and EU VAT) Declarable input VAT Declarable output VAT IT ACQ CEE 2008 IT ACQ CEE 2008 IT ACQ CEE Payable Sales VAT Register for Self Invoices, Intra-EU VAT - Purchase VAT Register for Italy - Declarable Input VAT Register for Italy - VAT Liquidation Report for Italy (Input VAT part of the report) - Declarable Output VAT Register for Italy - VAT Liquidation Report for Italy (Output VAT part of the report) For example, define tax register Registro Bolle Doganali 2008 for custom invoices to run Purchase VAT Register for Italy for the period in the year 2008: Tax Task name: Manage Taxes Navigation: Navigator > Setup and Maintenance -> Manage Taxes Assign seeded tax reporting type REPORTING_STATUS_TRACKING with Yes indicator at Tax level. Based on this tax reporting type all generated tax lines are initially stamped as not finally reported yet. 10

11 4. Specific Setup The specific setup pertains to VAT processing and reporting of specific documents like Customs Bills and Self Invoices. Specific Implementation Steps: For Customs Bill For Self Invoice 1 Specific Tax Rates Yes Yes 2 Tax Determining Factors define based on which tax determining factor(s) the specific tax rates are applied to a transaction. Yes Yes 2.1 Classification Categories Yes 2.2 Party Fiscal Classifications Yes 2.3 Transaction-Based Fiscal Classifications Yes 3 Third-Party Tax Profile Yes Yes 3.1 Create a specific Supplier Customs Dummy supplier for the self invoices 3.2 Create Tax Registration for party or party site level. Yes Yes 3.3 Enable offset taxes for party or party site level. Yes 3.4 Assign a party fiscal classification at party or party site level. CUSTOMS 4 Tax Rate Rule to apply specific tax rates 4.1 Create Taxable Basis Rule to use Assessable Value Yes instead of standard taxable basis formula. 4.2 Create Tax Rate Rule to apply a specific tax rate to a transaction. Yes Yes Tax Reporting Types and Codes Task name: Manage Tax Reporting Types 11

12 Navigation: Navigator > Setup and Maintenance -> Manage Tax Reporting Types Tax reporting type EMEA_VAT_REPORTING_TYPE is seeded and contains seeded reporting codes SELF INVOICE and CUSTOM BILL used only for the Italian VAT reports processing. These tax reporting codes are assigned to the specific tax rate(s) that relate to custom s invoices and self invoices. Tax Rates Task name: Manage Tax Rates and Tax Recovery Rates Navigation: Navigator > Setup and Maintenance -> Manage Tax Rates and Tax Recovery Rates->Rate Type should be Tax Rates Custom bill is entered in Payables as a specific invoice with zero line Amount and the Assessable Value populated instead. Therefore such an invoice should be recognized and correctly reported in the Purchase VAT Register for Italy this is why you must have CUSTOM BILL tax reporting code be associated with a specific tax rate. Define specific tax rate(s) to be applied on the custom invoices and associate the tax reporting code CUSTOM BILL to these tax rate(s). The specific tax rate should be defined for each rate percentage. In the example below IT VAT CUSTOMS BILL STD RATE is defined for rate 20% and is associated CUSTOM BILL tax reporting code.. 12

13 Self-invoice is entered in Payables as a specific domestic invoice with offset tax line. Therefore such an invoice should be recognized and correctly reported in the Payables Sales VAT Register (Self Invoices, Inter-EU VAT) for Italy and Purchase VAT Register for Italy. Define specific tax rate(s) to be applied on the self invoices and assign the tax reporting code SELF INVOICE to these tax rate(s).the specific tax rate should be defined for each rate percentage. In the example below IT VAT SELF-INVOICE RED1 RATE is defined for rate 10% and is associated SELF INVOCE tax reporting code. Assign specific offset tax rate code to each specific tax rate. 13

14 Tax Determining Factors Usage Specific tax rates defined above can be applied to transactions based on a variety of different tax determining factors. It is proposed to apply specific tax rate on customs bills based on Party Fiscal Classification. For example, define party fiscal classification CUSTOMS to classify the supplier Customs for which the customs invoices will be entered. The same approach can be taken for self invoices. You can define party fiscal classification Self Invoicing to classify the dummy self-invoice supplier for which self-invoices will be entered. However, further materials consider usage of the Transaction-Based Fiscal Classifications to show different possible option. You may choose another available determinant(s) to better comply a nature of the transaction. Classification Categories Task Name: Manage Classification Categories Navigation: Navigator > Setup and Maintenance -> Manage Classification Categories You create a party fiscal classification by assigning a Trading Community Architecture class category to a party fiscal classification type code that you define. Classification Codes defined under the Classification Category become fiscal classification codes belonging to the party fiscal classification type. 14

15 Party Fiscal Classifications Task Name: Manage Party Fiscal Classifications Navigation: Navigator > Setup and Maintenance -> Manage Party Fiscal Classifications Click on the Create icon on the Manage Party Fiscal Classification page and navigate to the Create Party Fiscal Classification page: Enter the Classification Category defined above in the Party Classification field of the page. Make sure Fiscal Classification Code CUSTOMS has appeared under Additional Information region. Enter Fiscal Classification Type Code information. Associated the tax regime defined for Italy under Associated Tax Regimes region. 15

16 Transaction-Based Fiscal Classifications Task name: Manage Transaction-Based Fiscal Classifications Navigation: Navigator > Setup and Maintenance -> Manage Transaction-Based Fiscal Classifications -> Search for: Transaction Business Category Code You can use transaction business categories directly to classify transactions, and use transaction business category codes as determining factors in tax rules. To set up a transaction business category code: Select your hierarchy view of the transaction business category code path. You can use Tax seeded transaction business category PURCHASE_TRANSACTION to identify and classify your business self invoice transactions. Use the sub-level to navigate to the Create Transaction Business Category Code page. Select PURCHASE_TRANSACTION and click on the Create Child Node button. Enter a transaction business category code and name. For example, create sublevel IT INVOICE TYPE. Select sublevel IT INVOICE TYPE and click on the Create Child Node button, enter the transaction business category code and name for self invoice. 16

17 Third-Party Tax Profiles Task name: Manage Party Tax Profiles Navigation: Navigator > Setup and Maintenance -> Manage Party Tax Profile -> Search For: Third-Party Tax Profile or Third-Party Site Tax Profile Create a specific supplier for the Customs. Create Tax Registration at party or party site level to make sure the tax is correctly applied. Assign party fiscal classification CUSTOMS at party or party site level under the Classifications tab. Create a specific dummy supplier for the self invoices. This dummy supplier represents your company. You cannot enter an invoice in Payables without suppler details. Create Tax Registration to make sure the tax is correctly applied. Enable Allow offset taxes flag under the Controls and Defaults tab. 17

18 Tax Rules Task name: Manage Tax Rules Navigation: Navigator > Setup and Maintenance -> Manage Tax Rules To setup specific Tax Rules you have to define the following entities used in these rules: Tax Determining Factor Sets Tax Condition Sets Taxable Basis Rule Navigation: Search For: Transaction Tax, Tax Rule Type: Taxable Basis Rule Create Taxable Basis Rule to consider for taxable basis the Assessable Value instead of standard taxable basis formula for purchase transactions with Custom supplier. If Bill-from party fiscal classification is CUSTOMS the tax will be calculated based on the assessable value. 18

19 Tax Rate Rules Navigation: Search For: Transaction Tax, Tax Rule Type: Tax Rate Rule Create Taxable Rate Rule to apply a specific tax rate on purchase transactions with Custom supplier. If Bill-from party fiscal classification is CUSTOMS then a specific tax rate IT VAT CUSTOMS BILL STD RATE is applied. Create Taxable Rate Rule to apply a specific tax rate on purchase transactions with dummy self-invoice supplier. This rule considers another tax determining factor. If the Transaction Business Category is Self Invoice then a specific tax rate IT VAT SELF-INVOICE RED1 RATE is applied. 19

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21 5. Transaction Entry in Payables Task name: Create Invoice Navigation: Navigator > Payables Invoices -> Create Invoice Create an invoice and pay special attention to the following. Sequencing: Voucher Number All purchase transactions must be sequenced to be reported in Payables VAT reports for Italy. A Voucher Number must be generated in the Accounting Tab section. Voucher Numbers appear on the report output as Sequence Number. Setup a gapless document sequence to achieve this. Use proper Document Category to enter desirable document and get it sequenced in accordance with dedicated sequence. Example of standard invoices sequencing: Example of custom invoice sequencing: Example of self invoice sequencing: 21

22 Example of Intra-EU invoice sequencing: To report on invoices with deferred tax make sure the payments are also sequenced: Specific Invoices Entry To enter a customs bill: Create a standard invoice for the specific supplier Custom: Enter Invoice Amount as the amount resulting from the total amount of the received custom bill. Enter Item line with amount 0.00 for the custom value line and enter the custom value amount in the Assessable Value field. Calculate tax and make sure the tax rate has been correctly applied to the tax line. 22

23 To enter a self invoice: Create a standard invoice for the specific dummy self invoices supplier. Enter Transaction Business Category Self Invoice. Calculate Tax and make sure the offset tax line has been generated and the tax rate has been correctly applied to the tax line. 23

24 Invoices with the deferred tax Make sure the invoices with deferred tax have Tax Point Basis Payment. Validating, Accounting and Posting All Payables transactions must be accounted to appear in VAT reports for Italy. Validate the invoice and Account and Post to Ledger. Check the validation and accounting status in the Status region. 24

25 6. Transaction Entry in Receivables Task name: Create Transaction Navigation: Navigator > Receivables Billing -> Create Transaction Create a transaction and pay special attention to the following. Sequencing: Document Number All AR transactions must be sequenced to be reported in AR VAT reports for Italy. Document Number appears on the report output as Sequence Number. Setup a gapless document sequence to achieve this. If you want to report on transactions with deferred tax make sure the receipts are also sequenced and are fully/partially applied. 25

26 Transactions with the deferred tax Make sure the transactions with deferred tax have Tax Point Basis Payment. 26

27 Completing, Accounting and Posting All Receivables transactions must be accounted to appear in VAT reports for Italy. Complete the transaction and Account and Post to Ledger. Check the completion and accounting status in the Status region. 27

28 7. Reporting Read the Declarable tax activity reporting restrictions and recommendations of Usage subsection below to correctly go through the reporting process. The Process for the VAT Reports for Italy can be summarised as follows: Business Flow Summary 28

29 Selection Process Navigation: Navigator > Tools -> Scheduled Processes The Selection Process is a basic tool to prepare taxable records for further tax reporting. Each run of the Selection Process is assigned a system generated reporting entity identifier. This reporting identifier drives all the VAT reports for Italy that are based on this solution. Select the transactions that you wish to report for the given reporting entity, period and source: Note: There is no report produced for the Selection Process. Subledgers activity reporting Navigation: Navigator > Tools -> Scheduled Processes The following subset of the reports is categorized as subledger (Payables/Receivables) activity reporting: - Purchase VAT Register for Italy - Payables Sales VAT Register (Self Invoices, Inter-EU VAT) for Italy - Receivables Sales VAT Register for Italy Te objective of these reports is to show all invoicing activity - to list all invoices issued/received in a given period, irrespective of when the tax is declarable to the tax authorities. These reports are submitted by the Reporting Identifier (generated by the Selection process), but only to identify the Tax Calendar and Tax Registers associated with the Tax Reporting Entity. The Purchase and Sales VAT Registers for Italy report on the transactions which Accounting Dates get into the period they are run for and which sequences they are sequenced are assigned to the tax register for which registers are run. The transactions are not driven based on the stamping done by the Selection Process but are driven directly from the related Payables/Receivables tables. These reports are not based on the Selection Process and Final Process. 29

30 Purchase VAT Register for Italy The Purchase VAT Register for Italy report is to print all invoices which accounting dates get into the period it is run for and which sequences are assigned to the tax register it is run for. If you want to report on Standard Invoices, Credit Memo Invoices, Debit Memo Invoices, Prepayments select the tax register defined for these documents at previous step. The report represents the Standard Invoices, Credit Memo Invoices, Debit Memo Invoices, and Prepayments for the given period. The output lists all transactions belonging to the period that are validated, accounted, posted and which sequence IT ACQ STD 2008 is assigned to the tax register Registro IVA Acquisti 2008 : 30

31 If you want to report on Custom Bills select the tax register defined for these documents at previous step: 31

32 The report represents the Custom Bill Invoices for the given period. The output lists all transactions belonging to the period that are validated, accounted, posted and which sequence IT ACQ BD 2008 is assigned to the tax register Registro Bolle Doganali 2008 : 32

33 Payables Sales VAT Register (Self Invoices, EEC VAT) for Italy The Payables Sales VAT Register for Italy report is to print Intra-EU invoices or self invoices which accounting dates get into the period it is run for and which sequences are assigned to the tax register it is run for. If you want to report on Intra-EU invoices select the tax register defined for these documents at previous step: The report represents the Intra-EU Invoices for the given period. The output lists all transactions belonging to the period that are validated, accounted, posted and which sequence IT ACQ CEE 2008 is assigned to the tax register Registro IVA CEE Vendite 2008 : If you want to report on self invoices select the tax register defined for these documents at previous step: 33

34 The report represents the Self Invoices for the given period. The output lists all transactions belonging to the period that are validated, accounted, posted and which sequence IT ACQ AUTOF 2008 is assigned to the tax register Registro Vendite Autofatture 2008 : Receivables Sales VAT Register for Italy The Receivables Sales VAT Register for Italy report is to print all transactions which accounting dates get into the period it is run for and which sequences are assigned to the tax register it is run for. The report displays the tax and taxable amounts and deferred (for the invoices with deferred tax) tax amounts and corresponding portions of taxable amounts. 34

35 The report represents the transactions for the given period. The output lists all transactions belonging to the period that are validated, accounted, posted and which sequences IT FAI 2008, IT NCI 2008, IT DM 2008 are assigned to the tax register Registro IVA Vendite 2008 : 35

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37 Declarable tax activity reporting Navigation: Navigator > Tools -> Scheduled Processes The following subset of the reports is categorized as declarable tax activity reporting. - Declarable Input VAT Register for Italy - Declarable Output VAT Register for Italy - VAT Liquidation Report for Italy These reports are to support periodic VAT liquidation in Italy (VAT calculation and settlement with the tax authorities). The calculation requirement is supported by the VAT Liquidation Report for Italy. Other two reports are to support VAT liquidation audit. Reporting on transactions is based on the Tax Point Basis, Tax Point Date and Reportable Flag determined by the users setup and stamped on the tax lines by Tax product. In general, these reports are to report on all reportable transactions which Tax Point Dates get into the period they are run for and which sequences they are sequenced are assigned to the tax register they are run for. Finally close an initial tax reporting period to have a proper preliminary reporting in the declarable tax activity reports. See the Declarable tax activity reporting restrictions and recommendations of Usage subsection below. This subset of the reports work in accordance with the following business flow: - Run the Selection Process that stamps transactions for further reporting and generates the Reporting Identifier used for the reports submission and Final Process. - Run preliminary versions of the reports. - Run Final Process that stamps selected transactions as finally reported. - Run final version of the reports. - Reprint final version of the reports if required. Declarable Input VAT Register for Italy The Declarable Input VAT Register for Italy is to print all reportable tax events in P2P which Tax Point Dates get into the period it is run for and which sequences are assigned to the tax register it is run for. 37

38 The report represents the transactions for the given period. The output lists all transactions belonging to the period that are validated, accounted, posted and which sequences are assigned to the tax register Declarable Input VAT Register Invoices with the deferred tax (such invoices have the Tax Point Basis Payment ) are reported only if fully or partially paid, the only paid part of the deferred tax is reported. These invoices are reported with the following references to the corresponding payment document: Payment Date is shown in the 'Applied Document Date' column; Payment Number is shown in the 'Applied Document Number column. Declarable Output VAT Register for Italy The Declarable Output VAT Register for Italy is to print all reportable tax events in O2C which tax point dates get into the period it is run for and which sequences are assigned to the tax register it is run for. You can also report on the selfassessed tax arisen on purchase invoices by running for a specific tax register. 38

39 The report represents the transactions for the given period. The output lists all transactions belonging to the period that are validated, accounted, posted and which sequences are assigned to the tax register Declarable Output VAT Register Transactions with the deferred tax (such transactions have the Tax Point Basis Payment ) are reported only if fully or partially paid, the only paid part of the deferred tax is reported. These transactions are reported with the following references to the corresponding payment document: Receipt Date is shown in the 'Applied Document Date' column; Receipt Number is shown in the 'Applied Document Number column. 39

40 VAT Liquidation Report for Italy The VAT Liquidation Report for Italy is to print summary information for all reportable tax events which tax point dates get into the period it is run for. 40

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42 Finalize Transactions for Tax Reporting Navigation: Navigator > Tools -> Scheduled Processes The Tax Final Reporting Process marks the tax records (on lines and distributions levels) as finally reported and closes the Tax Calendar Period. Any modification of the finally reported record is not allowed. The Tax Final Reporting Process is used to get the final version of the tax reports. The first run of the declarable tax activity reports for Italy after the Final Process is considered to be a final reporting. Final version of the report is supposed to be submitted to tax authorities. Before proceeding to running the Tax Final Reporting Process, it is important to review declarable tax activity reports for Italy that were previously run. If there are transactions that you expect to be reported that aren t in the reports, you may need to check the setup or enter missing transactions and re-run the Selection Process. Note: There is no report produced for the Final Process. 42

43 Declarable tax activity reporting restrictions and recommendations of Usage 1. Finally close an initial tax reporting period: In order to have a proper preliminary reporting in the declarable tax activity reports it is recommended either to finally close preceding 'blank' period or to accurately close the first reporting period. Blank period is the period preceding the first reporting period. For example, if you start working from JAN-15, use one of the following recommended approaches. a. 'Blank' period approach i. Run Select Transactions for Tax Reporting process for DEC-14 for both sources. ii. Run Finalize Transactions for Tax Reporting process for DEC-14 for both sources. b. First reporting period approach i. Run Select Transactions for Tax Reporting process for JAN-15 for both sources. ii. Run preliminary declarable tax activity reports for JAN-15 and make sure everything is correct. iii. Run Finalize Transactions for Tax Reporting process for JAN-15 for both source. iv. Run final version of the declarable tax activity reports for Italy. It is not allowed to report on the periods that are earlier than the first finally closed period. 2. Do not change the reporting context: The entire reporting process including Final for all reporting levels (Legal Entity, Ledger, TRN) in parallel is not supported. Choose the required reporting level for final reporting and use it for final closing of your initial period (considered above). All subsequent periods must be closed for the same reporting level. For example, the most commonly used reporting level is Legal Entity, using blank period approach the following should be done: i. Run Select Transactions for Tax Reporting process for Reporting Level Legal Entity, for Tax Calendar Period DEC-14 and for both sources. The reporting entity identifier is generated. It is based on the Legal Entity. ii. Run Finalize Transactions for Tax Reporting process for the this reporting entity identifier, for Tax Calendar Period DEC-14 and for both sources. iii. For final reporting run all processes and reports for all subsequent periods only for this reporting entity identifier. In context of this restriction and within the VAT Group configuration the final reporting on both individual legal entity and the VAT Group (Reporting Level is Tax Registration Number ) is not possible. Therefore you must decide to finally report on either individual members of the VAT Group or on the whole VAT Group. 3. Do not change the period types: The entire reporting process including Final for different period types (example: month, quarter) in parallel is not supported. Choose the required period type for final reporting and use it for final closing of your initial period (considered above). All subsequent periods must be closed for the same period type. 4. Preliminary reporting for any period: If the first reporting period has been correctly closed (for example, DEC-14 and then JAN-15), then run the Select Transactions for Tax Reporting process consecutively for each period (FEB- 43

44 15, MAR-15,..., DEC-15, etc.). The reporting for each period is done for the transactions that have tax point dates falling in the reporting period. It is possible to run preliminary reporting scattered within multiple periods without Finalize Transactions for Tax Reporting process and even to have gaps, for example: i. Run the Select Transactions for Tax Reporting process and declarable tax activity reports for Italy for FEB-15: the reports will have only transactions with tax point dates in FEB-15. ii. No running Select Transactions for Tax Reporting process in MAR-15. iii. Run the Select Transactions for Tax Reporting process and declarable tax activity reports for APR-15: the reports will have only transactions with tax point dates in APR Final reporting in chronological order without gaps: Final closing of the periods must be done consecutively. The next period that can be closed in the above example is FEB-15. No gaps are allowed in between finally close periods. As soon as a you decide to run Finalize Transactions for Tax Reporting process for the period, the whole set of processes and reports must be run: i. Run the Select Transactions for Tax Reporting process for FEB-15. ii. Run preliminary declarable tax activity reports for Italy for FEB-15 and make sure everything is correct. iii. Run Finalize Transactions for Tax Reporting process for FEB-15 for both source. iv. Run final version of the declarable tax activity reports for Italy for FEB Correction transactions: Always run the whole set of processes and reports before running the Finalize Transactions for Tax Reporting process. You should re-run the Select Transactions for Tax Reporting process and ensure all expected data are shown in the report. In the above example, you may work in APR-15, but still enter some transactions with tax point date in JAN-15, which is already finally closed. These so called correction transactions are picked by the Select Transactions for Tax Reporting process in the following open period, which is FEB-15. Therefore before final close of FEB-15 you must re-run the Select Transactions for Tax Reporting process for FEB-15, otherwise you may lose the correction transactions. 7. Further reporting of the already finally closed period: Running the Select Transactions for Tax Reporting process for finally closed period is not allowed and will be completed with an error. 8. Cancellations and modifications of the finally reported transactions: Do not cancel or modify transactions finally reported to tax authorities. Enter separate correcting transactions, as for example Credit Memos, in the subsequently open periods to adjust or offset the original finally reported transactions. Use the preliminary reporting to identify erroneous transactions and cancel or modify them before the final reporting. 44

45 Review periods statuses and reprint reports Navigation: Navigator > General Accounting -> Financial Reporting Center -> Transaction Tax Report History Using Transaction Tax Report History UI you can do the following for the given reporting entity and period: Review the period(s) for which the Final Process has already been run Review the report and tax register finally reported Reprint finally reported reports 45

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