How to Work with Profit Tax Accounting and Reporting

How-To Guide SAP Business One 9.0 Document Version: 1.0 2012-10-30 How to Work with Profit Tax Accounting and Reporting Country: Russia

Typographic Conventions Type Style Example Description Words or characters quoted from the screen. These include field names, screen titles, buttons labels, menu names, menu paths, and menu options. Textual cross-references to other documents. Example EXAMPLE Example Example <Example> Emphasized words or expressions. Technical names of system objects. These include report names, program names, transaction codes, table names, and key concepts of a programming language when they are surrounded by body text, for example, SELECT and INCLUDE. Output on the screen. This includes file and directory names and their paths, messages, names of variables and parameters, source text, and names of installation, upgrade and database tools. Exact user entry. These are words or characters that you enter in the system exactly as they appear in the documentation. Variable user entry. Angle brackets indicate that you replace these words and characters with appropriate entries to make entries in the system. EXAM PLE Keys on the keyboard, for example, F2 or EN TER. 2 2012 SAP AG. All rights reserved. Introduction

Table of Contents 1 Introduction... 4 2 Initial Settings for Profit Tax Report Accounting and Reporting... 5 2.1 Enabling Profit Tax Accounting and Reporting... 5 2.2 Defining the Path to Where XML Files Are Saved... 7 2.3 Defining Authorizations for Profit Tax Accounting and Reporting... 7 2.4 Setting Profit Tax Definitions... 8 2.4.1 Importing Codes from a Microsoft Excel File... 10 3 Running Profit Tax Reports... 12 3.1 Generating Profit Tax Reports... 12 3.2 Retrieving Profit Tax Reports... 14 4 Important Information for Working with the Mapping File in the Electronic File Manager... 18 4.1 Target and Source Documents... 18 4.2 Recommendations for Naming Elements... 18 4.3 Multiple Occurrences of Target Elements... 19 4.3.1 Case Studies: Multiple Occurrences of One Target Element... 19 Introduction 2012 SAP AG. All rights reserved. 3

1 Introduction Profit tax in Russia is calculated on the basis of taxable amounts of profit classified by the type of business activity and deductibles as defined in Chapter 25 of the Tax Code of the Russian Federation. Profit tax, deferred tax liabilities and assets, as well as constant tax liabilities and assets according to RAS 18/02 must be recorded to specific G/L accounts. In SAP Business One, you can do both profit tax accounting and reporting. Initial settings for profit tax accounting and reporting include the following: 1. Enabling profit tax accounting and reporting 2. Defining authorizations 3. Setting profit tax definitions Working with the tax report includes the following: 1. Profit tax report generation You can create an original profit tax report for a desired period and later update it and save as an adjustment or replacement, depending on the updates you make. 2. Profit tax report retrieval You can retrieve any saved profit tax report and create a journal voucher which you can then record as a journal entry. You can choose a specific report or accumulate all the reports since the beginning of the year and export them into an XML file, which you can then submit to the tax authorities. 4 2012 SAP AG. All rights reserved. Introduction

2 Initial Settings for Profit Tax Report Accounting and Reporting 2.1 Enabling Profit Tax Accounting and Reporting The profit tax accounting and reporting functionality is not enabled by default. Procedure To enable the functionality, do the following: 1. From the SAP Business One Main Menu, choose Administration System Initialization Company Details Accounting Data tab. 2. Select the Extended Tax Reporting checkbox. A system message appears, informing you about the functionality enablement. Choose Yes. Note You can disable the functionality at any time by deselecting this checkbox. 3. In the Period Type for Report Generation field, from the dropdown list, select the period type for which you want to generate a profit tax report: o Year o Quarter o Month o Period Initial Settings for Profit Tax Report Accounting and Reporting 2012 SAP AG. All rights reserved. 5

Recommendation You should not change this setting once you have defined it. 4. To specify additional profit tax report information, choose (Browse). The Additional Tax Report Information window appears. Define the fields as explained in the table below: Field Tax Authority Code Place of Submission Organization Name Economic Activity Code as per OKVED Classifier Taxpayer Attribute (Code) Code as per OKATO Depreciation method Budget Classification Codes Description/Activity Define the tax authority code to which you submit your profit tax reports. Select the code of the tax authority place to which you submit your profit tax reports. The system uses the organization name from the Company Details window. If needed, you can modify it here. Define the OKVED code as registered with the Federal State Statistics Service. Select the appropriate taxpayer attribute. Define the OKATO code as registered with the Federal State Statics Service. Select the desired depreciation method. Define the following specific budget classification codes as issued by the Federal Treasury of Russia: Federal Russian Federation Indication of the Person Signing the Document Surname Name Select the appropriate option. Enter the surname of the relevant person. Enter the given name of the relevant person. 5. Choose OK. 6. On the Accounting Data tab, choose the Update button. 6 2012 SAP AG. All rights reserved. Initial Settings for Profit Tax Report Accounting and Reporting

2.2 Defining the Path to Where XML Files Are Saved To create electronic files of profit tax reports, you need to define the path to where profit tax reports are saved in XML format. Procedure 1. From the SAP Business One Main Menu, choose Administration System Initialization General Settings Path tab. 2. In the XML File Folder field, select a directory for storing the files. Choose OK. 3. On the Path tab, choose the Update button. 2.3 Defining Authorizations for Profit Tax Accounting and Reporting If you do not want the information on profit tax to be available to all employees, you can set authorizations to specific users for the following activities: Setting profit tax definitions Generating profit tax reports Retrieving profit tax reports Prerequisite You have enabled the profit tax accounting and reporting functionality as described in Enabling Profit Tax Accounting and Reporting. Procedure From the SAP Business One Main Menu, choose Administration System Administration Authorizations General Authorizations. The left side of the window displays a list of all users defined in the company. Select the desired user from the list. 4. To assign authorization for the Profit Tax Reporting Definitions window, from the right side of the window, choose Administration Setup Financials Tax Profit Tax Report Definitions. In the Authorization column, select the desired level of authorization. 5. To assign authorization for profit tax generation and retrieval, choose Financials Financial Reports Accounting Tax. In the Authorization column, select the desired level of authorization for Profit Tax Report Generation and Profit Tax Report Retrieval. 6. Choose the OK button. Initial Settings for Profit Tax Report Accounting and Reporting 2012 SAP AG. All rights reserved. 7

2.4 Setting Profit Tax Definitions Due to legal requirements in Russia, various types of business activities and deductibles need to be classified separately in the report. In SAP Business One, this classification is achieved through profit tax boxes - each box is set up to calculate profit tax for a specific business activity or a deductible. There are a few hundreds profit tax boxes; however, depending on the scope of your business, you might not need to use all of them. You can use the default template, modify it, import and use all existing box codes, as well as create your own template. Prerequisite You have enabled the profit tax accounting and reporting functionality as described in Enabling Profit Tax Accounting and Reporting. Procedure 1. From the SAP Business One Main Menu, choose Administration Setup Financials Tax Profit Tax Report Definitions. 2. In the Effective From field, define the date from which you wish the definitions to be effective (Define New) or use the default template (01.01.1900). You can define different settings for different periods. 3. Select the declaration format (mapping file) in the Declaration Format field. Note If this field is not defined, you will not be able to create an electronic file of the report. 4. View or define fields in the following columns: 8 2012 SAP AG. All rights reserved. Initial Settings for Profit Tax Report Accounting and Reporting

Column Description/Activity # The visual order of the profit tax boxes Code Represents a unique profit tax box that calculates profit tax for a specific business activity or a deductible. Note If you define the code the same as the element tag of the XSD file, it is automatically mapped to the XSD scheme. For more information, see Important Information for Working with the Mapping File in the Electronic File Manager. Name Type The box name Determines the type of the box. You can choose one of the following types: Account If you define the type of a box as Account, you need to select one or more appropriate specific accounts, as well as one or more contra (corresponding) accounts, if needed, for this profit tax box. To select the accounts, do the following: 1. Double click the line number (#). A window with a list of accounts appears. 2. In the Select column, select the checkbox for a desired account. If needed, in the relevant Contra Accounts column, define one or more contra (offsetting) accounts. Recommendation If you wish to add a group of contra accounts which share the same initial code numbers, in the Contra Accounts column, enter the initial numbers followed by an asterisk (*). For example, if you enter 40*, all the account codes starting with number 40 are added. 3. Select the Update button. Formula You can set a formula for mathematical operations with profit tax boxes. Use [BoxCode] to denote the box in the syntax. Manual Input Select this type if you need to define a specific value that is not possible to define within other types. If you define it as a numeric value, you can use it in a formula. Manual Text Input Select this if you want to enter specific text for the box. Single Choice You can define a limited set of specific values that are not possible to define within other types. To define the values for choice, double click the line. You can set the default value to be used in the report generation. You can also use this box in a formula, in which case the numeric value will be used as a number in the formula. Position in Report Define the position number of this box code in the profit tax declaration template. Initial Settings for Profit Tax Report Accounting and Reporting 2012 SAP AG. All rights reserved. 9

Column Debit/Credit Formula Syntax Sort Order Absolute Value Post-To Account Description/Activity This column is enabled for the Account type box code only. You can define here which transactions to display in the report. This column is enabled for the Formula type box only. Define the formula. Define the order of the lines by number. Select this checkbox if the result of the box should be displayed as a positive number in the report. Define the account to be used for profit tax accounting needs. Profit tax, deferred tax liabilities and assets, and constant tax liabilities and assets are recorded to this account. Note For profit tax accounting purposes, both Post-To and Post-To Offset accounts must be defined. If you do not define both accounts, then profit tax, deferred tax liabilities and assets, as well as constant tax liabilities and assets cannot be recorded. Post-To Offset Account Define the offset account to be used for profit tax accounting needs. 5. Choose the Update button. 2.4.1 Importing Codes from a Microsoft Excel File If you wish to use all existing box codes, you can import them into the Profit Tax Report Definitions window. To get all the profit tax box codes from the database, use the following SQL script: select t0.boxcode, t0.boxname, 'BoxType' = case when t0.boxtype = 'A' then 'Account' when t0.boxtype = 'S' then 'Choose Value' when t0.boxtype = 'F' then 'Formula' when t0.boxtype = 'T' then 'Text Input' Else 'Manual value' End, 'Side' = case when t0.dbtcrdt = 'B' then 'Debit/Credit' end, when t0.dbtcrdt = 'C' then 'Credit' Else 'Debit' t0.formula,t2.account,t4.contraact, t3.value, t3.descr, t0.account, t0.offsetact from OBoX t0 left join box2 t2 on t0.boxcode = t2.boxcode and t0.effecdate = t2.effecdate left join box3 t3 on t0.boxcode = t3.boxcode and t0.effecdate = t3.effecdate 10 2012 SAP AG. All rights reserved. Initial Settings for Profit Tax Report Accounting and Reporting

left join box4 t4 on t0.boxcode = t4.boxcode and t2.account = t4.account and t0.effecdate = t4.effecdate where t0.reporttype = 'S' --- and t0.effecdate = [%Effective_Date] order by t0.sortorder For information on how to import data from and export them to a Microsoft Excel file, see the online help for SAP Business One. Initial Settings for Profit Tax Report Accounting and Reporting 2012 SAP AG. All rights reserved. 11

3 Running Profit Tax Reports When you run the profit tax report for a certain period for the first time, you can select the transactions you wish to include in the report and save it as the original one. Later, you can include or exclude certain transactions by creating an adjustment of the report. If you need to add transactions for the same period, which were recorded after the original report (or adjustment) was created, you can create a replacement. 3.1 Generating Profit Tax Reports Prerequisites You have enabled the profit tax accounting and reporting functionality as described in Enabling Profit Tax Accounting and Reporting. You have set the profit tax reporting definitions as described in Setting Profit Tax Definitions. Procedure 1. To generate the profit tax report, from the SAP Business One Main Menu, choose Reports Financials Accounting Tax Profit Tax Report Generation. The Profit Tax Report Generation - Selection Criteria window appears. 2. In the dropdown list of the Tax Declaration Type field, you can select one of the following: Original Select this if you are creating a report for a specific period for the first time. Adjustment Select this if you have already generated a report for a specific period, but you wish to add or remove some of the transactions from the report. Replacement Select this if you have generated a report for a specific period, but later you have recorded additional transactions for the same period and you wish to include them in the report. 12 2012 SAP AG. All rights reserved. Running Profit Tax Reports

Note Once you save a replacement of a report, you can no longer retrieve the original or any adjustment of the original report. 3. Define the Tax Declaration Name fields. The system lists available options depending on the profit tax accounting and reporting activities you have performed before. Example In the window shown above, the user wants to generate an original report. The available options are: o 2012 This option is available because the user has not yet generated all the reports for the current year. o 2nd, 3rd and 4th Quarter In the initial settings, the user selected Quarter as the period type for report generation. Therefore, only quarters are available for the report generation name. Since the user has already generated profit tax reports for the first quarter, the dropdown menu lists the remaining options. 4. In the Date field, choose whether you want the report to consider the posting date or the document date of the transactions. In the From and To fields, select the date range according to which you want transactions to be included in the report. 5. To generate the report, choose the OK button. The Profit Tax Report Generation window appears. To expand the rows and see all listed transactions, choose the Expand button. 6. View or define the following columns: (The self-explanatory columns are not described in this table.) Columns Selected Approved Activity/Description Select this checkbox to include specific transactions in the report. To select all box codes, double-click the column header. If you have generated an original report, the fields in this column are deselected. If you have generated an adjustment, the checkboxes of transactions that have been included in the original report are selected. Running Profit Tax Reports 2012 SAP AG. All rights reserved. 13

Columns Formula Component Code Tax Code / Acc. Name Amount Offset Account Specific Code Value Text Data Post-To Account Post-to Offset Account Remarks Activity/Description The formula you have defined in the Profit Tax Definitions window appears. You cannot modify this field. Displays the component of the formula. If you have defined this profit tax box as type Account, the field displays the relevant account for which transactions are listed. Displays the amount being reported. If you have defined this field as type Account, it displays the relevant offset account for which transactions are listed. Displays the code value you have defined in the Profit Tax Definitions window. If you do not wish to have the default value in this field, you can modify it. Appears only with boxes of type Manual Text Input. You can enter text. Displays the account to which profit tax, deferred tax liabilities and assets, and constant tax liabilities and assets will be recorded. Displays the offset account for the Post-To account. Remarks from a journal entry line are automatically copied to this field. 7. If you have modified one or more columns, choose the Recalculate button to update the report. 8. To save the selected transactions, choose the Add button. In the System Message window, choose Yes. 9. To save the report, choose OK. 3.2 Retrieving Profit Tax Reports Profit tax retrieval is used for the following purposes: To create a journal voucher for a saved report To create an electronic file for the profit tax report Prerequisites You have defined the XML file folder as described in Defining the Path to Where XML Files Are Saved. You have generated and saved a report as described in Generating Profit Tax Report. Procedure 1. From the SAP Business One Main Menu, choose Reports Financials Accounting Tax Profit Tax Report Retrieval. The Profit Tax Report Retrieval - Selection Criteria window appears. 14 2012 SAP AG. All rights reserved. Running Profit Tax Reports

2. Define the following fields: Field/Checkbox/Table Selection Criteria Name Description/Activity You can use this field to save and apply a specific selection of the profit tax boxes that you want displayed in the report retrieval. To save new selection criteria, do the following: 1. In the menu bar, choose Data Add. 2. Define the selection criteria name. 3. In the BAS Codes table, select the boxes you wish to be displayed in the report retrieval. 4. Choose the Save button. To apply saved selection criteria, select it from the dropdown list of this field. Tax Declaration Name Adjustment Select the name of the tax report you wish to retrieve. Select the desired adjustment number. This is available only if you have previously generated one or more adjustments to the report. Summary Since Beginning of the Year Select this checkbox to accumulate the report since the beginning of the year. Note If you wish to create a journal voucher, do not select this checkbox, as you can only create journal vouchers for each reporting period separately. BAS Codes Hide BAS Codes Without Transactions Select the checkboxes of those codes that you want displayed in the report retrieval. Select this checkbox if you wish to hide the profit tax boxes for which there are no transactions in the report. 5. Choose the OK button. Running Profit Tax Reports 2012 SAP AG. All rights reserved. 15

The Profit Tax Retrieval window appears. Note If you have selected the Summary Since Beginning of the Year checkbox in the Selection Criteria window, the Create Voucher button is not displayed in the Profit Tax Retrieval window. To expand the rows and see all listed transactions, choose the Expand button. 6. In the Specific Code field, you can update values for boxes of type Manual Input, as well as for type Single Choice. If you have updated any of those, choose the Update button. o To create a journal voucher for the selected report, choose the Create Voucher button. The Journal Vouchers window appears. 1. Click the row of the desired journal voucher. The Remarks field automatically displays the information about the profit tax report to which it refers. The lower table lists transactions included in the voucher; one line represents one transaction. 2. Choose the Post Voucher button. 3. In the System Message window, choose Yes. 16 2012 SAP AG. All rights reserved. Running Profit Tax Reports

Note The Posting Date, Due Date, and Doc. Date fields of the journal entry created by posting the voucher are defined automatically as the last day of the posting period for which the journal voucher was created. o To create an electronic file of the report, in the Profit Tax Retrieval window, choose the Create File button. The Profit Tax Report - Export Details window appears. 1. On the Report Specific tab, in the Revision Number field, specify the sequence number of the report to be submitted to the authority for the specific report period. 2. The data on the Company Details tab are copied from the Additional Tax Report Information window, as described in Enabling Profit Tax Accounting and Reporting. 3. In certain cases, you might want to include a user query category in the electronic file of the report. For information on the use of the field User Query Category to Be Included in Export, see Important Information for Working with the Mapping File in the Electronic File Manager. 4. Choose the OK button. Note If you have not defined the declaration format (mapping file) as described in Setting Profit Tax Definitions, the system is not be able to create an electronic file of the report. The electronic file is saved to the XML file folder you defined in the initial settings. For instructions on how to submit the electronic file to the tax authorities, refer to the official web page of the Federal Tax Service of Russia. Running Profit Tax Reports 2012 SAP AG. All rights reserved. 17

4 Important Information for Working with the Mapping File in the Electronic File Manager You can adjust the existing system mapping file or create your own using the electronic file manager functionality (EFM). If you wish to modify the system mapping file, download it from SAP Business One Main Menu Administration Setup General Electronic File Manager. 4.1 Target and Source Documents In the EFM add-on, you need to define the source and target documents. The source document is the BASReportInterim.xml file generated by the system and located in the default XML file folder you have defined, as described in Defining the Path to Where XML Files Are Saved. For the target document, use the relevant XSD format provided by the taxation authority. 4.2 Recommendations for Naming Elements For convenience, the box name in the Profit Tax Report Definitions window should be the same as the name of the relevant target element inside the XSD scheme. If the target element is not unique, use the following naming convention for the box: ElementName_ParentElementName. 18 2012 SAP AG. All rights reserved. Important Information for Working with the Mapping File in the Electronic File Manager

4.3 Multiple Occurrences of Target Elements To apply multiple occurrences of some target elements, you can use two solutions: Hashes (#) in the box name User queries Both solutions are described in the case studies below. 4.3.1 Case Studies: Multiple Occurrences of One Target Element Case 1 The target element named УплСрок can have multiple occurrences by definition. There are three payments relevant to УплСрок, so this target node occurs three times in the result file, as shown below. In the target document, the parent element УплСрок should occur three times and have two child elements: Срок (date) and НалПУ (tax amount). Solution Using Hash in the Box Name 1. To define the box name, use the following formula: ParentElement#PaymentNumber#ChildElement Note The hashes denote a new node level in XML. In the PaymentNumber position, you can use a word instead of a number; however, in this case, a number is the most convenient choice. In this case, you should define the box names as follows: УплСрок#1# НалПУ УплСрок#1# Срок УплСрок#2# НалПУ УплСрок#2# Срок УплСрок#3# НалПУ УплСрок#3# Срок Important Information for Working with the Mapping File in the Electronic File Manager 2012 SAP AG. All rights reserved. 19

The relationship between the nodes in the source document and the box names is displayed in the figure below. 2. In the mapping file, as displayed in the figure below, you need to start the link from the middle box, which indicates the number of occurrences. Case 2 In this case, the target element of interest is УплСрок, as well. A user has obtained the information about tax payments from the company database by means of user query. The query returned two records that are relevant for УплСрок, which means that this target node occurs twice in the result file, as shown in the figure below. 20 2012 SAP AG. All rights reserved. Important Information for Working with the Mapping File in the Electronic File Manager

Solution Using User Query Upon creating an electronic file of the profit tax report, you can apply the user query category, which is then included in the electronic report file. All user queries that are relevant for profit tax reports should be placed into the same category. To include a user query category in the file, do the following: 1. In SAP Business One, when creating an electronic report file, as described in step 7 of Retrieving Profit Tax Reports, the Profit Tax Report - Export Details window appears. 2. From the dropdown list of the field User Query Category to Be Included in Export, select the relevant category. Choose OK. Important Information for Working with the Mapping File in the Electronic File Manager 2012 SAP AG. All rights reserved. 21

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