Richard Cornelisse

SAP review

In Audit Defense, Business Strategy, EU development, Indirect Tax Automation, Indirect Tax Strategic Plan, Processes and Controls, Tax News, Technology on 19/10/2012 at 12:42 pm
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(In Dutch) The most important task of SAP’s indirect tax functionality is to determine the VAT consequences of each transaction. To do this, the system must have all relevant VAT information such as the VAT qualification, VAT rate and reporting and invoicing requirements.

Relevant variables may change after the implementation of the functionality:

  1. VAT information (new master data)
  2. Other types of transactions (e.g. change in the business model)
  3. Legislation (a different VAT rate or VAT rules).

An SAP review tests the working of the VAT configuration under the influence of such changes. The SAP review can demonstrate that the VAT configuration must be improved or that additional control measures should be added to the Tax Control Framework.

The review can also bring errors and risks to light, allowing a more focused analysis to take place. After the quantification and evaluation of the risks and errors, they are assigned to the risk profile in order to be able to test against risk tolerance.

The KEY Group uses its data analysis application for this.

Depending on the client’s requirements, the following VAT-relevant subjects can be studied in SAP during an SAP review:

Depending on the client’s requirements, the following VAT-relevant subjects can be studied in SAP during an SAP review:

  • Scope:  risks
  • VAT treatment, correctness and the logic of the tax code structure and attributes such as VAT rate, the defined tolerance percentage when calculating VAT paid, the setting for EU-relevant VAT reporting.
  • Incorrect VAT rates and reporting (filing and/or ICL listing)
  • Conditions tables, records and decision tree logic
  • Incorrect VAT treatment/code and returns
  • The derivation from VAT registration numbers on the invoice of the partner functions used – sold_to, ship to, payer and bill_to.
  • Incorrect VAT number on the invoice, no 0% rate possible
  • VAT code descriptions for invoices
  • Incorrect sales invoices
  • iDoc tables, if applicable
  • Incorrect VAT treatment/code and returns

Click for a summary of common SAP errors.

Related Topics:

Robbert Hoogeveen is COO of the KEY Group

 

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