Value Added Tax
challenges & opportunities.
Digitization of the sales tax function brings both opportunities and challenges. It enables companies to optimize their processes, increase efficiency and improve compliance.
Process automation
With the help of modern technologies such as Tax Engines or SAP DRC, companies can largely automate their sales tax processes. This not only saves time, but also improves the accuracy of sales tax calculation and reporting.
ERP system world
Implementing new technologies and processes can be challenging, especially when it comes to integrating with existing ERP systems. The conversion to modern ERP systems such as SAP S/4HANA requires significant adjustments and good project management.
Complex VAT determination and regulatory requirements
German VAT law is characterized by national and EU regulations, which makes tax determination, complex. At the same time, the digitalization of the VAT function is leading to increasing regulatory requirements, including real-time data exchange, national e-invoicing systems and digital reporting systems (DMS), as well as electronic tax audits. This makes it all the more important to ensure data quality as early as the posting stage in order to be able to base the relevant reporting activities on secure data.
Historically grown processes and system settings:
Many companies are struggling with outdated and inefficient sales tax processes that make digitization and optimization difficult. In addition, there is often a lack of complete transparency of the business transactions relevant for VAT (transaction matrix).
Time-consuming compliance activities
Compliance tasks regularly tie up resources and capacities in the company, which can be time-consuming and cost-intensive, especially in the case of recurring activities. In addition, manual compliance activities are prone to errors and should therefore be standardized and automated as far as possible from a Tax CMS perspective. This is also against the background of the approaching reporting requirements (ViDA).
our consulting.
DO WHAT YOU LOVE.
We are your reliable partner in the constantly changing digital VAT landscape. In addition to classic tax consulting, we offer you comprehensive support for optimizing your VAT processes and systems, as well as ongoing project support for VAT-related topics in SAP S/4HANA (and other ERP systems, e.g. Dynamics 365 Finance). In addition, we specialize in the selection and implementation of different tax engines (and have the relevant certificates). Furthermore, we accompany you in the implementation of future requirements within the framework of the EU initiative "VAT in the Digital Age".
Since most of today's VAT processes are automated (e.g. implemented tax determination), the documentation of these tax systems and settings is becoming increasingly important with regard to the requirements for procedural documentation (according to GoBD). We support you in the conception and creation of your procedural documentation (incl. design of the creation and update process - e.g. via Sharepoint and workflows).
Our experts will support you with their experience and expertise in order to master the challenges of the digitalization of the VAT function and to fully exploit the associated opportunities.
Our certificates for
Tax Engines:
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fields of play.
Process consultingIn process consulting, the focus is on optimizing tax processes. With the help of the Business Process Model and Notation (BPMN) the processes are visualized and documented. BPMN is a standard for modeling business processes and enables a clear and understandable representation. By using BPMN, a common language is created that facilitates understanding and collaboration between the various stakeholders. Documenting processes with BPMN supports the identification of potential improvements and facilitates their implementation.
Business transaction matrixThere is often uncertainty about the existing VAT relevant business transactions in the company. This is where the support in the conception and structure of a business transaction matrix comes in. This serves to define and map the circumstances relevant to VAT and at the same time constitutes the basis for the tax determination to be prepared. Exemplary procedure: - Identification of the company's operational business processes - VAT assessment according to parameters such as - performing / receiving company - Company code - Short description of the business transaction - Plant - Material description - Material classification - ... On this basis, a precise sales tax determination for all case constellations / business transactions is mapped via customizing. The business transaction matrix thus ensures transparency and security in the VAT treatment of all business transactions.
ComplianceIn the increasingly complex tax landscape, the fulfillment of reporting obligations for VAT plays a decisive role. In addition to VAT returns and advance returns, this also includes other reporting obligations such as the recapitulative statement also known as EC sales list, Intrastat and other country-specific reporting obligations such as the Standard Audit File for Tax (SAF-T). The correct and timely preparation of these reports makes a significant contribution to ensuring compliance and avoiding penalties. Our expertise and experience in this area ensure reliable and efficient processing of VAT reporting obligations.
Value Added Tax in SAP S/4HANA Support in the implementation of VAT issues within SAP S/4HANA implementation or transformation projects. This can be done as an extended arm of the tax department, as a PMO or as part of existing project teams. With our extensive expertise in VAT in SAP S/4HANA, we support you from day one and help to find the right language for the project or implementer. Regularly supported topics among others: - Uniform tax code concept - Maintenance of related tax accounts - Customer & supplier classification - Definition and setup of VAT relevant accounts - G/L account setting B-Segment (tax category, posting without tax allowed) - Partner functions & VAT ID in business partner In addition, the execution of a pre-study prior to a possible migration from SAP R/3 or SAP ECC to SAP S/4HANA is offered. This ensures that all VAT requirements are taken into account right from the start.
VAT Health Check As part of the VAT Health Check, the existing VAT-related processes are jointly validated and potential optimization needs are identified. The results of the work are made available on the basis of a documentation of results, which contains specific implementation proposals for each of the identified topics. Thus, the VAT Health Check not only offers a review of the current VAT processes, but also provides individual solutions for possible weaknesses and helps to optimize VAT processes and increase efficiency.
Data Analytics With increasing regulatory requirements for real-time data sharing and electronic audits, the importance of data analytics in VAT compliance and reporting is growing. Traditional, manual data reviews and reliance on ERP systems are often insufficient because they may not capture detailed, non-transactional data or are not flexible enough for complex supply chains. Many ERP systems are also not configured by default, leading to data gaps. Integrating automated data analytics into the VAT compliance process can solve these problems. It not only ensures the integrity of submitted data, but also ensures real-time compliance with VAT standards. Two key methods of analytics in this regard are automatic correction rules, which automatically fix errors and fill in missing elements, and error detection rules, which identify potential problems. Many companies currently implement manual analytics or use standalone tools that do not integrate with sales tax reporting solutions or provide automated error detection. However, an effective solution should integrate with existing ERP systems, automate the analysis process, use VAT knowledge to validate and complete data, analyze all transactions, and create an audit trail by documenting changes and corrections. Only by automating data analytics as an integral part of the VAT compliance process can the new requirements for real-time reporting and electronic audits be met.
VAT in the Digital Age The " VAT in the Digital Age " means a fundamental transformation of VAT processes. It brings with it new challenges and opportunities, particularly in relation to cross-border digital reporting processes such as the Digital Reporting System (DRS) and national e-invoicing systems. A key aspect of this digital transformation is invoicing at the individual transaction level. Companies must now be able to file a tax return within a few days of issuing an invoice. In addition, the use of a standardized invoice format is mandatory. This requires a comprehensive overhaul of existing processes and systems, including the consolidation of different data sources, the adjustment of correction runs and the maintenance of master data. For companies using SAP, there is an additional layer of complexity: they must familiarize themselves with the new SAP DRC module and successfully manage its implementation. To meet these challenges best possible, a systematic approach is required. This includes project management controlled by the tax function, clarification of process responsibilities within the company, and coordination with tool providers for tax determination, reporting, and invoicing. Implementing " VAT in the Digital Age" is a comprehensive task that requires effective coordination, collaboration of cross-functional teams, and targeted use of technology. However, with the right support and expertise, the digital transformation of the VAT function can be successfully implemented.
Tax Engine The implementation of a tax engine is a complex process that requires sound advice. Our task is to support companies in modernizing and adapting their tax processes, especially in connection with the migration to new ERP systems such as SAP S/4HANA. In doing so, we actively participate in the planning and implementation process to promote a consistent approach. A Tax Engine is a cloud-based service model that manages sales tax determination and is continuously adapted to the global tax environment. It acts as a flexible solution that can respond to changing regulatory environments without requiring changes to the company's own systems. The use of a tax engine enables companies to expand their business activities to new markets while ensuring efficient and legally compliant tax determination. We assist in the selection and implementation of the appropriate tax engine, which can be selected from a number of reputable vendors: - Vertex Inc - O-Series, - Thomson-Reuters - ONESOURCE Indirect Tax Determination and - Sovos - VAT Determination Our goal is to ensure efficient and legally compliant tax determination, which contributes to the optimization of business processes.
Procedural documentationThe creation of complete and VAT compliant procedural documentation can be a challenge. However, with the right procedural documentation, business processes can be optimized and compliance improved. We support you in creating a so-called business blueprint. This covers all tax-related topics and maps the technical system documentation. We take a structured and methodical approach to ensure that all relevant tax aspects are covered. This includes, among other things, the implementation and maintenance of topics relevant to VAT, such as tax codes, tax classification for material and customer as a basis for tax determination, and tax characteristics of the business partner. The business blueprint provides a systematic overview of all processes relevant to VAT, thus enabling efficient and transparent documentation. In this way, compliance can be ensured, giving the company security and protecting it from potential risks.
Reporting SAP DRC + Other (incl. Vendor Selection) The SAP Document & Reporting Compliance (DRC) solution represents the new reporting world in SAP S/4HANA. SAP DRC is divided into the two areas of external reporting and processing of electronic documents (e-invoicing). The previously known and widely used ABAP reports (e.g. RFUMSV00 for the advance return forVAT) will therefore soon be a thing of the past and replaced by corresponding FIORI apps. In the area of e-invoicing DRC generates invoices in the appropriate electronic formats (e.g. XML according to EN-16931) based on existing sales orders. We support you in validating the use of SAP DRC in your company and in setting up appropriate reporting processes.
