SAP S/4HANA for Tax
challenges & opportunities.
The tax department often faces various challenges related to processes
and the quality and availability of tax-relevant data in the SAP ERP system:
Complex processes
Tax processes can be extremely challenging due to the complexity of tax laws and regulations in different countries and regions. The tax department must ensure that all tax-related processes are carried out correctly, which requires time and resources.
Manual data entry
Manual entry and processing of tax-related data can be error-prone and lead to inconsistencies in reports. This can lead to problems with tax returns and reporting.
Data silos
In some cases, tax-related data may be isolated in different departments and systems, making it difficult to consolidate and access the information you need.
Deferred access
If tax-relevant data is not available in real time, this can lead to delays in reporting and affect the tax department's ability to react quickly to changes.
To overcome these challenges, it is important that companies invest in modern technologies and tools that automate processes, improve integration and increase data quality. By using solutions like SAP S/4HANA, companies can improve the efficiency and accuracy of tax processes and promote informed decision-making in the tax department. A well-integrated and automated SAP landscape can help address tax department challenges and ensure compliance.
our advice.
DO WHAT YOU LOVE.
Our consulting services focus on identifying, defining and implementing the relevant tax requirements for your SAP systems.
We attach particular importance to the optimization of the process steps:
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data request
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Customization
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processes
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reporting
Whether you are implementing a SAP S/4HANA transformation or updating (refreshing) your existing SAP/ERP systems, our team is at your disposal.
Our comprehensive services include the conception of business blueprints, global and local templates as well as the evaluation of the technical implementation and services.
We support you during the implementation phase and accompany the test management including training.
Trust in our expertise to integrate tax processes into your SAP landscape and thus increase your business efficiency. Contact us and discover how we can support you in the successful implementation of your goals.
fields of play.
Value Added TaxSales tax must be considered as a transactional tax in all relevant business processes. In SAP S/4HANA, sales tax processes can be better anchored in the operational business, data quality can be improved, and data granularity can be increased. Thus, the entire sales tax end-to-end process can be supported. Sales tax determination is mapped on the basis of the relevant sales tax business transactions. The definition and mapping of the relevant sales tax-related facts in SAP (business transaction matrix) are therefore the basis of an implementation project and should be designed accordingly. A tax determination based on such a business transaction matrix makes it easier to adjust system settings in the future and to achieve a precisely fitting tax determination in the current SAP S/4HANA system. In this way, data quality and granularity are ensured so that the sales tax reporting and reporting processes can be implemented as automatically and standardized as possible. Relevant topics here include: Tax code concepts, decision regarding available functionalities in SAP S/4 HANA (tax reporting date, plants abroad), business partner concept, material master data, invoicing, reporting, etc.
Direct taxesSAP S/4HANA can also set the basis for highly automated income tax reporting and mapping of the reporting processes for direct taxes. Thus, the tax function can make a corresponding contribution to a data-based acting tax function via the integration of the requirements resulting from this. In the area of direct taxes, SAP can help support the following activities and tasks: - Supporting the preparation of annual financial statements as part of tax reporting - Fulfilling tax declaration obligations (submission of corporate and trade tax returns including tax balance sheets in electronic form) - Managing tax audits (BP) - Monitoring income tax risks as part of tax compliance management through process-integrated/ERP-based controls - Fulfilling tax withholding obligations in ongoing business operations Relevant topics here include: Chart of Account, account settings (A-segment, B-segment), ledger concept (parallel / extension ledger, tax balance sheet, tax tagging etc.).
Transfer PricingThe Universal Journal in SAP S/4HANA combines all relevant transactional data from Finance and Controlling in a common transaction data table as a central data pool. The tight integration of FI and CO can help operationalize transfer pricing. Data analysis and data visualization support reporting obligations such as country-by-country reporting and transfer pricing documentation (e.g., to create transaction matrices). The integration of transfer pricing requirements with SAP S/4HANA can thus support the transfer pricing lifecycle. In addition to transactional accounting data, company master data is also relevant for this purpose. Relevant topics here include: Business partner concept, maintenance of trading partner as a central parameter of the master data (VBUND), chart of accounts, tax tagging, identification of additional data fields for clustering the transactional data, etc.
Withholding TaxThe extended withholding tax functionality in SAP supports the process-related requirements of withholding tax in the company. With Extended Withholding Tax, both credit-side and debit-side withholding tax can be mapped. The main tasks that are processed in the area of withholding tax, e.g. on the inbound side, in the business processes (essentially within the procure-to-pay processes) initially include the assessment of facts for any withholding tax deduction obligations, in order to be able to derive the correct tax determination in SAP S/4HANA from this with the selection of the correct withholding tax types or withholding tax codes (tax determination). Based on this, the data available in SAP S/4HANA can be queried for the tax reporting process and the notifications for withholding tax can be created, checked and finalized for transmission to the tax authorities and at the same time the tax certificates for the creditors can be issued. In addition, the functionality is also used for the procedural mapping of construction withholding tax and tax havens (tax withholding for black list countries). Relevant topics here include: Activation of the extended withholding tax functionality, business partner concept, process-related requirements for the P2P process, maintenance of materials and exemption certificates (validities), etc.
Pillar 2The requirements of Pillar 2 are intended to ensure a global minimum taxation of all corporate groups with annual sales of at least EUR 750 million. The aim of the implementation is thus to limit international tax competition and consequently to create extended tax justice. The Global Anti-Base Erosion (GloBE) Rules play an important role in this. The GloBE Rules ensure that large multinational companies pay a minimum level of tax on the income they generate. Within SAP S/4HANA, it must therefore also be ensured that the requirements resulting from Pillar 2 are taken into account and implemented. Here, basic settings / requirements within SAP Core must be taken into account (data quality and granularity), and in addition, solutions such as SAP Analytics Cloud (SAC) and/or SAP Profitability and Performance Management (PaPM) must be validated.
Plastic TaxA new levy has come to the attention of tax departments in the form of the plastic tax. A plastic tax is a tax or levy imposed on the manufacture, sale or use of plastic products. The main goal of such a tax is to reduce the consumption of plastic products and provide incentives for greener alternatives. Plastic taxes are often used as tools to address environmental issues related to plastic waste and pollution of oceans and other ecosystems. The exact design of a plastic tax can vary from country to country. In some cases, taxes are levied on specific plastic products such as single-use plastic bags, plastic bottles or packaging. The amount of the tax can also vary and can be based on either the weight, volume or retail price of the plastic products. However, with regard to the plastic tax, the challenge for the tax department is somewhat more complex. The information from the accounting department is only of partial help here. In addition, there is a lack of cross-border harmonization of the plastic tax. The following information is needed for standardization: - Identification of the relevant plastic components in the master data and bills of materials - Weight of the relevant plastic components - Quantity of plastic components placed on the market in the respective country There are different ways to implement the requirements within SAP. In addition to SAP Core, there are already special SAP solutions for mapping the requirements - SAP Recycling Administration (SAP REA) and SAP Responsible Design and Production (SAP RDP). The solutions provide support in particular for: - Mapping of relevant master data - articles, packaging, fractions, single use plastic, recycled plastic, exceptions, etc. - Possibility of data integration non-SAP systems - consideration of relevant business transactions, i.e. production and import, exclusion export with integration to SAP Sales, Purchasing, Materials Management. - Support of legal reporting obligations - integration with SAP modules: SD Pricing, SAP CO Controlling and FI Finance.