3807946 - How to configure Reverse Charge Mechanism (RCM) tax boxes for the Saudi Arabia VAT Declaration

Tax Box 55 (base amount for reverse charge output tax), Tax Box 65 (base amount for reverse charge adjustments), Tax Box 75 (tax amount for reverse charge), and Tax Box 85 (tax amount for reverse charge adjustments) in the Saudi Arabia VAT Declaration Report show zero or incorrect amounts in the Run Statutory Reports app using the Saudi Arabia VAT Report (report category SA_VAT_DCL) in SAP Document and Reporting Compliance – statutory reporting.

SAP S/4HANA Cloud Public Edition

1. Post a supplier invoice or import transaction using reverse charge tax codes
2. Run the KSA Advanced VAT Return using the Run Statutory Reports app.
3. Open the generated report (table or PDF) and observe that reverse charge base and tax amounts show zero.

This SAP KBA is relevant only for Saudi Arabia.

Ensure that the key user for configuration has the same minimum authorization as delivered with the Configuration Expert – Business Process Configuration (SAP_BR_BPC_EXPERT) business role template.

For RCM transactions, SAP posts both input tax (processing key ESA) and output tax (processing key ESE) under the same tax code (for example, VX or VI) in the same accounting document.

The tax box structure in the Enhanced Tax Box Structure is incorrectly configured. Specifically:

• Tax Groups 55 and 65 (base amount tax boxes) incorrectly contain ESA entries for tax codes VX, VI (Box 55) and VR, VP (Box 65). Since Box 55 and Box 65 are base amount boxes, they should contain ESE entries only. The presence of ESA entries causes the positive and negative base amounts to offset each other, resulting in zero values.
• Tax Groups 75 and 85 (tax amount tax boxes) may be missing the required combination of both ESE and ESA entries, or have incorrect operator signs, causing incorrect tax amounts to be reported.

Complete the following activities to configure the correct tax box mappings for RCM amounts in the Saudi Arabia VAT Declaration Report.

1. Open the configuration activity Define Enhanced Tax Box Structure (ID: 103011).

2. Enter SA in the Country/Region field.

3. Copy the current tax box structure version to a new version, enter a validity date for the new version, and save the data.

   Note: To make changes, you must copy the tax box structure as a new version. This ensures that all changes are done in the new version of the tax box structure.

4. On the Define Tax Groups (Internal) tab for the new version, complete the following:

   a. Delete all existing entries where the Transaction Key is ESA for Tax Codes VX and VI assigned to Base Group 55.

   b. Delete all existing entries where the Transaction Key is ESA for Tax Codes VR and VP assigned to Base Group 65.

   c. Maintain the following correct entries for all four tax groups:

   Tax box configuration for tax base amount for reverse charge (Tax Box 55):

   Tax Code	Transaction Key	Debit/Credit Balance	Base Group Number	Operator
   VX and VI	ESE	H	55	-
   VX and VI	ESE	S	55	+

   Tax box configuration for tax base amount for adjustments for reverse charge (Tax Box 65):

   Tax Code	Transaction Key	Debit/Credit Balance	Base Group Number	Operator
   VR and VP	ESE	H	65	-
   VR and VP	ESE	S	65	+

   Tax box configuration for tax amounts for reverse charge (Tax Box 75):

   Tax Code	Transaction Key	Debit/Credit Balance	Tax Group Number	Operator
   VX and VI	ESE	H	75	-
   VX and VI	ESE	S	75	+
   VX and VI	ESA	H	75	-
   VX and VI	ESA	S	75	+

   Tax box configuration for tax amounts for adjustments for reverse charge (Tax Box 85):

   Tax Code	Transaction Key	Debit/Credit Balance	Tax Group Number	Operator
   VR and VP	ESE	H	85	-
   VR and VP	ESE	S	85	+
   VR and VP	ESA	H	85	-
   VR and VP	ESA	S	85	+

5. On the Assign Tax Group to Tax Box tab, verify that the following assignments exist for the new version:

   Tax Box	Tax Group
   55	55
   65	65
   75	75
   85	85

6. Save the changes.

Saudi Arabia VAT – Reverse Charge configuration (Help Portal)

RCM, reverse charge, Advanced VAT Return, KSA VAT, Saudi Arabia, DRC, tax box 55, tax box 65, tax box 75, tax box 85, ESA, ESE, enhanced tax box structure, VI, VX, VR, VP , KBA , FI-LOC-FI-SA , Saudi Arabia , FI-LOC-SRF-RUN-GNR , Generation , How To