Israeli Localization Scope

The objective of this article is to provide basic information about the Israeli Localization Package provided by SAP Israel. It should be useful during scope definition phase in Rollout project implementations on Israeli branches.

For more details about each one of the process you can check SAP Site or watch to the presentation created by SAP Israel (link)

SAP Israel localization is included on component C-CEE (ECC Core Country Versions for EEM Countries) and contains the following processes:

Withholding Tax Report:

WHT calculation is based on standard withholding tax (Extended WHT is recommended by SAP, but also classic WHT is supported).

There are 3 periodic reports:

· 102 Form: Monthly report with total amounts paid to vendors and total tax deducted

· 856 File: File issued once a year with detailed information of payment/tax deduction per vendor

· Vendor Confirmation: Letter to be sent to vendors once a year with the total payment / tax deduction (this form is usually sent only for vendors with tax deduction)

Important remark: Since WHT rates to be applied in vendor payments can be changed any time by Tax Authorities SHAAM interface can be used to have vendor master data updated accordingly.

VAT Report:

VAT calculation and report are based on standard VAT Process. Current VAT rate is 17% (last updated on 2015).

There are 2 periodic reports:

· PCN File: Monthly file with details of each invoice reported

· Annual Report: Only for companies reported under Consolidation number (Ichud Oskim). It is not supported by Localization Package.

Unifiles (AKA Uniform Files):

This is an Audit report (set of files) that can be requested by Tax Authorities for Auditing purposes. It contains detailed information about several processes (from sales orders to outbound deliveries to billing documents to customer payments, inventory transactions, purchased orders, vendor invoices, etc) and it’s by far the most complex item in Israeli Localization Package.

6111 report:

Annual report with Company Financial Statement(BS and PNL).

Payment Files:

Payment formats (DMEE) available in Localization package are MASAV (ACH) and Citibank.

MASAV format is used for local vendor payments in shekels (local currency) and Citibank format can be used for local and foreign vendor payments via Citibank.

Cashier System:

If the company receives payments in checks or cash, issuing receipts (and managing cashier books) is mandatory.

Localization package provides a set of transactions to help managing cashier transcations:

· Incoming payments and devolution

· Receipt issue

· Bank deposit process

· Reports

Asset Accounting:

Asset accounting legal reporting is based on standard asset module. A tax depreciation area is used to manage the depreciation terms according to Tax Authorities definition (useful life).