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In the old days, every plant needed to be assigned to the country of the company code.

In SD, this applies to replenishment and consignment.

You can meet these requirements by carrying out billing with special settings in pricing for the relevant

EU Tax Reporting with Plants Abroad Functionality

Posted by Praveen Kumar in praveen.kumar109 on Dec 17, 2008 9:31:34 AM


One of the challenging things while setting up SAP system in any country is, setting up of
Correct Tax System.
European Market is treated as Single Market even though it has 27 independent countries with
their own Tax legislations and Tax Rules.
Any company which is doing business in EU, it must have Value Added Tax Registration
Number (VAT No.) for that specific European Country, and it must do its business under that country
specific Tax Rules and Regulations.
Need of Plants Abroad Functionality:
This functionality is required under following situations:
i. A company is located in any of the European Country (E.g. Luxemburg) and has its Plant / warehouse
setup in another European Country (E.g. Germany).

ii. While setting up SAP system, company code will have the address of Company's Central Location.
(i.e., address of LU)
iii. It must reports all its goods movement from or to Germany warehouse with Germany VAT number to
Local Tax Authority.
iv. And in Luxemburg, the company must report all its sales and purchases as per LU Legal Regulations
with LU VAT number.
v. In this case, it requires to setup two company codes for two VAT numbers, which is not advisable
when Business wants to run on same company code.
vi. So, to handle this situation, Plants Abroad functionality will be implemented, where business can be
run with single company code but with different VAT numbers.
vii. Plants Abroad functionality is used to handle tax issues for companies that have tax registration in
more than one country.
viii. This functionality ensures that correct Value Added Tax (VAT) numbers are printed on the
corresponding Purchasing as well as on Sales Documents.
ix. This functionality ensures to fulfill the country specific legal requirements.
Treatment of Goods Movement in Plants Abroad:
Let us see how the following standard business processes are treated differently when Plants Abroad
functionality is activated.
A) Intra Company Stock Transfer
1. Normally for Intra Company Transfers, there will not be any Invoice
generated, because, it's shear Stock Transfer between two different locations within the same
company code.

2. As there is no transfer of ownership, the invoice generation is not required.

3. The standard Intra Stock Transfer process has the following steps of
i. Intra Company Purchase Order (UB)
ii. Replenishment Delivery (NL)
iii. Goods Receipt against Purchase Order (MIGO)
iv. MIRO against Purchase Order.
4. But when the two Plants / Warehouses are setup in different EU counties, and the stock is moving
between them, can be treated as goods movement across borders.
5. As per EU regulations, any goods movement between boarders is need to be reported using
INTRASTAT reports.
6. INTRASTAT reports can only be generated using Invoice documents and here in this situation there
will not be any invoice generated as this stock transfer is treated as goods movement but not any
7. So we can generate a new invoice which is called as Plants Abroad Invoice, so that,
i. It can be captured in INTRASTAT, to follow tax regulations.
ii. As this is ZERO valued invoice, this can be treated as just a goods
movement and not sale.
8. With this implementation, the new Intra Stock Transfer process will be as follows:
i. Intra Company Purchase Order (UB)
ii. Replenishment Delivery (NL)
iii. Goods Receipt against Purchase Order (MIGO)
iv. Plants Abroad Invoice (WIA)
v. MIRO against Purchase Order.

Consignment Sales Process

1. Consignment Process will have four steps i.e., Consignment Fillup, Consignment Issue, Consignment
Return and Consignment Pickup.
2. Out of these four steps, only Consignment Issue and Consignment Returns can be treated as actual
sales to customers and the respective invoices can be generated.
3. Consignment Fillup and Pickup can be treated as just a goods movement and can't be treated as any
4. But when, Consignment Fillup and Pickup is done and the consignee is located in any EU country
other than the Plant / Warehouse located country, then this goods movement is need to be reported as
per the EU tax regulations.
5. So, Plants Abroad invoice is generated so that these movements can be captured in INTRASTAT and
these invoices are ZERO invoices as there is no sale and this is only goods movement.
Effects of Plants Abroad Implementation:
1. Once the Plants Abroad functionality is activated in SAP system, then a new field "Country Currency"
and "Exchange Rate" will be shown in Set Country Global Parameters configuration.

2. This "Country Currency" is maintained with respective country currency for all those countries which
have company code and the respective "Exchange Rate Type" is also maintained, otherwise,
accounting documents will not be generated.
3. While creating new tax codes or maintaining existing tax codes, a new field "Reporting Country" will
be shown.

4. This field must be maintained with the respective reporting country, so that, these tax codes will be
reported in the respective country Tax Reports. Otherwise, the country wise tax reports can't be
5. While doing MIRO (Invoice Verification), the default country of company code will be shown in the
document, so, this must need to be changed with change Reporting Country option, so that, this value
can be posted with the respective warehouse country.

6. Due to Plants Abroad activation, while generating advance tax reports (RFUMSV00), there will be
new field "Tax Return Country" and a new check box "Country Currency instead of Local Currency" will
be available in Further Selections.

7. Here we have to give, the country code for which the Tax Report is generated (say LU or IT or DE)
and need to check the check box of "Country C instead of local C" (if the company code country
currency and Plant / warehouse country currency are not same) so that the report can be generated in
Local Currency and not with the currency of Company code country.
8. And while executing INTRASTAT Arrivals and INTRASTAT Dispatch reports, need to give the fields
"Country of Declaration" and "Dec Currency" so that the report can be generated based on this
declaration country and currency, because the same company code is maintained in different countries
with different VAT numbers for different Plants / Warehouses.

Conclusion :
Plants Abroad Functionality ensures to run the business as per the European Tax regulations and
provide correct Tax Reports and INTRASTAT reports, when companies have their plants / warehouses in
other European Countries and stock movements are done from those countries.