Intercompany Trade

Intercompany trade relationship exceptions based on tax country

The intercompany trade relationships are specified using the department or warehouse, enterprise unit or financial company. The agreement can also depend on the tax country, especially when multiple registrations within one financial company are used. In that case, the sales office can use a different registration based on the tax country. If, on an intercompany trade order, the sales office and the delivering warehouse use the same tax country, another agreement can be used. For example, because no internal invoicing is required, another transfer pricing rule must be used, or because no intercompany trade transactions are required at all (see the "Intercompany trade order without transactions" section).

Through relationship extensions, a specific agreement can now be specified based on the tax countries. This is available if Registration by Tax Country is active.

Intercompany trade order without transactions

In some scenarios, it is required to specify an intercompany trade order without transactions. Because no transactions are created, this is similar to the scenario without an intercompany trade order. However, on such an intercompany trade order, intercompany trade transactions can be enabled manually and the appropriate transfer pricing rule and other agreement details can be specified. This requires approval from the buyer and the seller.

For example, intercompany trade orders without transactions can be used in these scenarios:

• In general, intercompany trade is not applicable, but only required for specific transactions, for example, in the case of expenses. If an intercompany trade order without transactions exists, intercompany trade transactions can be specified after creation of the order or expense booking.
• A new enterprise unit has been created, but no intercompany trade agreements have been made yet. With an intercompany trade order without transactions, intercompany trade transactions can be enabled on the intercompany trade order after creation of a warehouse transfer or sales order (before actual shipments).
• Intercompany trade is applicable between two enterprise units, but not for an internal transaction if this transaction is taxable in the same country. In this case, an agreement can be specified at a lower level between tax countries, which overrules the agreement at a higher level. An intercompany trade order without transactions can be created for this.

Delivery terms and point of title passage retrieved from the originating order

Through tax exceptions, the tax countries and code can be specified on the intercompany trade order based on the delivery terms and the point of title passage. This is required, for example, when the delivery terms are ex works in which case domestic tax may apply. Therefore, it is required to retrieve the delivery terms and the point of title passage from the originating order instead of the internal business partner.

To support this, the Default for Delivery Terms and Point of Title Passage parameter has been added to the Intercompany Trade Parameters (tcitr0100m000) session. This parameter is used to specify whether the delivery terms and the point of title passage on the intercompany trade order must be retrieved from the internal business partner or from the originating order.