f SAP Country Version Chile (CCL) B An Overview SAP Globalization Services December 2011 Welcome to this session on SAP country version Chile, also known as CCL.Objectives At the end of this lesson, you will be able to + Explain the localization requirements of country version Chile (CCL) * Outline the localization features of CCL * Describe the localization features in Logistics and Financials * Describe solution support and the rollout strategy for CCL After completing this session, you will be able to Explain the localization requirements of country version Chile (CCL) Outline the localization features of CCL Describe the localization features in Logistics and Financials Describe solution support and the rollout strategy for CCLAgenda Country Version Chile (CCL): Quick Facts Chile Requirements: An Insight * Compliance Snapshot * CCL Solution Coverage CCL Solution Features + Financials * Logistics Additional Highlights * Support and Rollouts * Recommendations = Starting with some quick facts about country version Chile, this session will give you some insight on requirements that need to be addressed by any ERP software provider in Chile, = Itwill briefly cover the features offered in country version Chile in the areas of Logistics and Finance. = [twill also touch upon the version’s support system, and will offer some recommendations for those who are new to country version Chile.2 ll Country Version Chile (CCL) Quick Facts ay So let's start with some quick facts about country version Chile.Country Version Chile (CCL) Quick Facts Key Strengths + More than a decade old and a trusted name among the organizations, + Provides legal compliance for business transactions. + Development and support for Chile: In India, Germany, and Brazil + Standard and simplified rollout strategy for legal changes + Large customer base Challenges * Chilean government is changing laws to have more control of taxation via electronic media » Legal changes: = Often unplanned — Released on short notice \ Ai = Often mission-critical = Key strengths: = Country version Chile was born in 2000 as part of standard ERP. CCL is now more than a decade old, and is now a trusted solution. = CCL provides legal compliance features for various business transactions, enabling businesses to run better. Development and support for these features are provided by highly skilled teams located in India, Germany, and Brazil, and in the largest research and development centers in SAP Labs across the world. = Country version Chile is now operational at most of the top corporations in Chile across various industries. = Challenges: = The Chilean government is changing laws to have more control of taxation via electronic, media. Legal changes in Chile are often unplanned and released on short notice.Chile Requirements: An Insight Legal Compliance Snapshot ay Now lets walk through the Chilean requirements. We will look at the taxation structure, which is the basis for compliance rules for business taxation supported by CCL.Legal Compliance Requirements In Chile, the tributary laws are controlled by Internal Revenue Service (IRS) taxes. The auditing firm that contracts with SAP in Chile has extensive experience in the basic tax requirements imposed by the IRS for all taxpayers This presentation discusses only the tax laws that are recommended by the audit firm engaged by SAP.Legal Compliance Requirements Financials (1) al ID Every company that starts a business in Chile is, first required to obtain a tax ID. ‘Taxpayers confirm this tax ID with the Internal Revenue Service (IRS). The IRS assigns an RUT number (tax ID) to the new company. This number has a check digit for validation This RUT identifies the company. The company must ensure that this RUT is validLegal Compliance Requirements Financials (2) Sales Tax and Service Tax * This tax is levied on taxable sales and services, as defined by law. * This tax amount is used to pay the taxes to IRS. The amount payable to the IRS arises from the difference between the sum of the sales tax and services made in the period of one ‘month and the tax credit of the same month, + If there is a debit (or credit) remaining after taxes are paid for the period, this remainder will be used in the next tax period, and so on, until the balance is zero. Additional Taxes ‘Some goods entering the country must pay an additional value-added tax (VAT), Examples: Fuel tax, stamp tax, or alcohol tax = Sales taxes and service taxes are levied on taxable sales and services, as defined by law. This tax amount is used to pay the taxes to IRS. The amount payable to the IRS atises from the difference between the sum of the sales tax and services made in the period of one month and the tax credit of the same month. If there is a debit (or credit) remaining after taxes are paid for the period, this remainder will be used in the next tax period, and so on, until the balance is zero. = The most important taxes under the indirect taxation framework for business transactions are’ Additional taxes. Sales tax (commonly known as VAT) Service tax Withholding taxLegal Compliance Requirements Financials (3) Fixed Assets The law says that taxpayers who declare their income through a proven effective balance sheet must annually adjust their assets and liabilities. The initial net value of the fixed assets in the new fiscal year will be adjusted as indicated by the law in article 41 = The initial net value of the fixed assets in the new fiscal year will be adjusted as indicated by law in article 41. + For assets acquired during the year, intial net worth will reset according to the variation in the consumer price index in the period between the last day of the month prior to the acquisition and the last day of the previous month's balance, 10Legal Compliance Requirements Financials (4) Reporting In Chile, all taxpayers who are affected by the First Category Tax must maintain legal ledgers to show the taxes that they must pay to the IRS each month. ‘These books can be on paper or may use electronic media,Legal Compliance Requirements Logistics (1) Sales Distribution Taxpayers who are considered sellers of goods or services must issue tax documents to support sales operations. These documents must comply with regulatory requirements defined by law and the IRS. Among other requirements, these documents must be stamped by the IRS with consecutive control numbers. ‘Some of the documents are: = Invoices + Receipts * Credit notes + Debit notes * Delivery guides The IRS, in conjunction with the companies, controls numeration of the documents that deal with VAT tax credits. 12Legal Compliance Requirements Logistics (2) Materials Management Inflation distorts accounting because materials are revalued according to article 41. The accounting must be adjusted to include this new price. Characteristics of the calculation of inflation in Chile: * The adjustment is permanent and mandatory + tis annual + Itimplies a modification of net income Consider this data in the calculation: + Replacement cost, * Consumer price index (IPC) * Exchange rate 13Chile Requirements: An Insight CCL Solution Coverage ay Now let's take a look at what is covered by country version Chile.CCL Solution Coverage This localization was designed for businesses with ‘operations in Chile. It is based on input from external legal agencies that provided us with information regarding the correct definition of the law. The Chilean localization comprises functions for laws and business practices particular to Chile. It also contains a country template, which helps customers to customize the system according to local requirements. Most of the country-specific functions for Chile relate to Financials and Logistics. 15CCL Solution Features Financials ay Next, let's focus on the localization features for financials.CCL Solution Features Financials (1) Fiscal ID The localization uses the RUT validation. The ID number includes one digit that is used to validate the RUT. Taxes There are a number of taxes defined for sales and purchases, including: = Value-added tax (VAT), which is known as impuesto al valor agragado (IVA) Fuel tax (impuesto a los combustibles) * Stamp tax (impuesto de timbres y estampilias) When it creates a company code using the template for Chile, the system automatically makes all the settings required for these taxes. Chart of Accounts When you create a chart of accounts, you use chart INT as a reference. This chart is supplied with the standard system. 7CCL Solution Features Financials (2) Fixed Assets ‘The method provided by SAP to implement the Fixed Asset adjustment for inflation corresponds to the "differential method,” which incorporates the difference in IPC in each period. The main features of this method are: * Calculate or adjust annually or monthly. + Configure two factors (date of acquisition of the fixed asset in the current year and the previous year) when the calculation of inflation is annual * Configure 13 factors (12 when the date of acquisition of the fixed asset isin the current year and one if the date of acquisition isin the previous year) when the calculation of inflation is monthly. * Update the fixed asset master data, * Update the accounting 18CCL Solution Features Financials (3) Reporting There is a group of legal reports required by the IRS. These reports may be required by the authorities for auditing purposes. The reports must be submitted to the authorities on sheets of pre-numbered paper, which are obtainable from official stationery offices. The reports are + General Accounting > Daily Ledger, General Ledger, Tributary Balance, Stamp Tax Ledger * Account Receivable > Sale Ledger * Account Payable > Withholding Tax Ledger, Purchase Ledger 19CCL Solution Features Logistics ay Now let's delve deeper into CCL features, starting with logistics. 20CCL Solution Features Logistics (1) Sales Distribution The country version controls the numeration on the preprinted forms. The system numbers various billing documents using the official document numbers that the authorities provide to the company. The official document number comprises up to seven digits, and the numeration is a unique correlative national (Correlativo Unico Nacional) Examples of official documents: * Invoices * Credit notes * Debit notes aCCL Solution Features Logistics (2) Materials Management There are a number of special requirements related to adjusting materials for inflation that are available in the country version, including: * Calculate the inflation on all materials every six months, but post it only annually + Follow procedures according to the law to adjust materials that have been purchased domestically or those that have been imported. There is a procedure for both cases, = Adjust imported materials using the exchange rate that, was valid on the date they were purchased. * Record adjustment postings using a separate G/L account, 22CCL Solution Features Logistics (3) Materials Managements The Materials Ledger in Chile is a more complex ledger required for the IRS. This report displays movement of materials that are used in the core business process. It includes the quantity of the goods moved (inbound or outbound) and their value. The country version is available in both foreign and local currency, and considers the following functionalities: * Material edger Other functionalities when the material ledger is not activated 23Additional Highlights » Support and Rollouts * Recommendations ay That was a brief overview of the functionalities in country version Chile. 24Country Version Chile Support and Rollouts = CCL FAQ and SAP Notes + Full support for legal changes throughout the year delivered through SAP Notes * Special rollout programs for major legal changes * Proactive analysis backed up by legal experts * Country page at SAP Service Marketplace: http://service.sap.com/localization Starting with CCL support and rollout: = There are a number of informative notes available in the SAP Notes repository, which includes FAQs for various functionality points and some installation guidance notes. = Legal changes, which are often unplanned, are rolled out throughout the year via SAP Solution Notes. These Notes can be directly applied to customer systems. = Additionally, big legal changes are supported by special rollout programs and roadshows across the country. = SAP Chile has contracted with external legal agencies who provide input on how to proactively and correctly apply such changes. = SAP Service Marketplace also hosts a dedicated country page for Chile. This page contains the latest updates on country version Chile, and is directly accessible by customers. = There is also a best-practices package available for Chile localization. You can find this in SAP Service Marketplace. 25Country Version Chile Recommendations * Not a “do-it-yourself” system = Expert knowledge required on global templates * Upgrade to minimum support pack for ccL * User training = One of the basic requirements for implementation is key users who have knowledge of relevant legal requirements. ‘ A, ay [eee | Lastly, here are some recommendations for those new to country version Chile. = First and foremost , CCL is not a “do-it-yourself” system. Because it is so complex, we recommend that you have experts on board right from the beginning, = We strongly recommend that the customer upgrade to the minimum Support Pack level for CCL. = User training is critical to a successful CCL implementation. = One of the basic requirements for implementation is key users who have knowledge of relevant legal requirements. 26Lesson Summary You should now be able to: + Explain the localization requirements of country version Chile (CCL) * Outline the localization features of CCL * Describe the localization features in Logistics and Financials * Describe solution support and the rollout strategy for CCL peo You should now be able to: Explain the localization requirements of country version Chile (CCL) Outline the localization features of CCL Describe the localization features in Logistics and Financials Describe solution support and the rollout strategy for CCL a7Related Information For more information on the topics discussed in this lesson, see the following references: * Globalization Knowledge Base: / pu/fservice sap com/GKB * Literature (Implementation of Country Versions for SAP ERP Systems): ISBN 978-3-86342-217-2 For more information on the topics discussed in this lesson, see the references listed here. 28Ey Thank You! Contact information ‘SAP Globalization Services: alobalization@sap.com 29