Posts Tagged ‘richard cornelisse’
automated, business transactions, chain transactions, compliance, deployment, Enterprise resource planning, ERP, ExxonMobil, fraudulent, functionality, GST, harmonization, legal entities, Marc van Rijbroek, online VAT manager, parameter, processes, real-time evaluation, recovery, richard cornelisse, risk management, risks, robbert hoogeveen, SAP, SAP AG, Shared Service Centers, Sigma Aldrich, system, tailor-made, Tax Control Framework, taxmarc™, tool, Value-added tax, VAT, VAT assessments, VAT liability, VAT refunds, VAT registration, VAT reports
In Audit Defense, Business Strategy, EU development, Indirect Tax Strategic Plan, Processes and Controls, Tax News, Technology on 15/02/2013 at 1:45 pm
Real-time and fully automatic evaluation of tax compliance eliminates VAT risks
Amsterdam, February 15, 2013 – Taxmarc™ – an online VAT manager – provides companies with a complete overview of all data relevant to determining the VAT liability for business transactions.
This enables tailor-made VAT determination of transactions. Moreover, Taxmarc™ provides an online tax control framework that encompasses real-time evaluation of tax compliance and the consistency of the combination of the VAT data entered.
Hereby it offers an effective tool that facilitates efficient deployment of employees and optimal risk management regarding indirect tax.
For virtually every company the efficiency of compliance with local VAT regulations depends entirely on the functionality of the underlying ERP system, such as SAP. Determining the VAT liability and recovery in these systems is only partly automated and is mostly done manually.
By drawing upon 30 parameters instead of the 4-8 parameters in standard SAP, Taxmarc™ enables – without extra interface – a fully automated VAT determination of all (chain) transactions in SAP.
The tool incorporates VAT relevant data of all legal entities in order to ensure the correct VAT determination of transactions. SAP exclusively focuses on transactions within a single company; it only assesses the underlying individual transactions and fails to link the current transactions to the VAT results of previous transactions.
As a consequence, companies with VAT registrations in different countries cannot automatically comply with all VAT obligations. In addition, many multinationals operate with different versions of ERP systems, each business unit often has a separate system and there are multiple core systems per country.
This creates genuine risks such as VAT assessments, insufficient VAT refunds, and possibly fraudulent transactions. Also, synchronizing the periodic VAT reports based on these different sources takes a lot of time and resources.
Extra ‘brain capacity’
“The business models of internationally operating enterprises have radically changed over the last couple of years. As business practices go beyond national boundaries and sufficient harmonization of regulations in different countries is lacking, maintaining the VAT position is extremely complicated.
Without the right VAT regulations, regular ERP systems fail to process data correctly, risking incorrect calculation of VAT, failure to comply with local VAT obligations, and transactions that cannot be commercially executed”,
Richard Cornelisse, Director Strategy & Sales of Taxmarc™ emphasizes.
“The standard functionality of SAP is insufficient for building a viable and adequate virtual VAT manager.
In actual practice, these flaws in SAP are often patched up in order to keep the system running. Taxmarc™ basically creates a bypass in SAP, thereby building on the standard functionality and infrastructure of SAP, but we are adding extra ‘brain capacity’.
Real-time fiscal monitoring
Taxmarc™ provides a VAT/GST Tax Control Framework integrated in SAP. This framework ensures that transactions that do not comply with tax laws are automatically blocked.
Beside the highly improved preventive controls regarding risk management, Taxmarc™ underpins more efficient business processes and increased productivity. It enables a substantial reduction of the working hours and resources that are spent on the regular manual tax return process, as well as centralization of local compliance functions (Shared Services Centers).
Taxmarc™ has been implemented by multiple renowned multinational companies, including AkzoNobel Chemicals, Sigma Aldrich, ASM International NV, Fujifilm and ExxonMobil.
Our business model is extremely complex, especially with regard to VAT. We’re operating worldwide with many (chain) transactions that go across the borders and therefore we often have multiple VAT registrations per legal entity.
Using the standard settings in SAP, automatic VAT determination of individual transactions was not possible.
Taxmarc™ has enabled automatic VAT determination of all transactions for our company. Taxmarc™ identifies real-time when certain transactions are not possible, for instance because a local VAT registration is missing.
Improbable and atypical results are immediately visible and can instantly be corrected, so corrections afterwards can be prevented.
Client references are important and can be provided. It is your way to validate that we indeed keep our promise.
Taxmarc™ is investigated by a Big4 organization and is qualified as the best VAT quality solution for the complex business models of customers.
- END PRESS RELEASE –
For more information
Richard Cornelisse, Director Strategy & Sales of Taxmarc™, phone: +31 6 53 99 48 74; e-mail: richard.cornelisse@taxmarc.com
Robbert Hoogeveen, Director Technology of Taxmarc™, phone: +31 6 57 94 70 93; e-mail: robbert.hoogeveen@taxmarc.com
Website: www.taxmarc.com/en/
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accuracy, AkzoNobel, AP, AR, ASM International, automated VAT determination, brain capacity, business transactions, bypass in SAP, chain, chain transactions, corrections afterwards, Data, determination logic, efficiency, Enterprise resource planning, ERP system, ExxonMobil, Fujifilm, hierarchy of SAP, incoming invoices, Indirect tax, invoices, manual processes, Marc van Rijbroek, outgoing invoices, parameters, real-time evaluation, richard cornelisse, risk management, robbert hoogeveen, SAP, SAP AG, Sigma Aldrich, standard SAP, tailor-made, tax codes, tax compliance, Tax Control Framework, Tax Engine, tax rates, taxmarc™, taxmarc™ Tax Engine, TCF, time-consuming, tool, Value-added tax, VAT, VAT determination, VAT liability, VAT position, VAT regulation, virtual VAT manager
In Uncategorized on 11/02/2013 at 10:21 am
Taxmarc™ Leadership
(l2r) Robbert Hoogeveen Director Technology, Richard Cornelisse Director Strategy & Sales, Marc van Rijbroek CEO of Taxmarc™
Taxmarc™ – a virtual VAT manager – provides companies with a complete overview of all data relevant to determining the VAT liability for business transactions.
This enables tailor-made VAT determination of transactions.
Moreover, Taxmarc™ provides an automated tax control framework that encompasses real-time evaluation of tax compliance and the consistency and accuracy of the combination of the VAT data entered.
Hereby it offers an effective tool that facilitates efficient deployment of employees and optimal risk management regarding indirect tax.
For virtually every company the efficiency and accuracy of compliance with local VAT regulations depends entirely on the functionality of the underlying ERP system, such as SAP. Determining the VAT liability and recovery in these systems is only partly automated and is mostly done manually.
By drawing upon 30 parameters instead of the 4-8 parameters in standard SAP, Taxmarc™ enables – without extra interface – a fully automated VAT determination of all (chain) transactions in SAP.
The tool incorporates VAT relevant data of all (chain) transactions between legal entities in order to ensure the correct VAT determination.
SAP exclusively focuses on transactions within a single company; it only assesses the underlying individual transactions and fails to link the current transactions to the VAT results of previous transactions. As a consequence, companies with VAT registrations in different countries cannot automatically comply with all VAT obligations.
Extra ‘brain capacity’
The business models of internationally operating enterprises have radically changed over the last couple of years. As business practices go beyond national boundaries and sufficient harmonization of regulations in different countries is lacking, maintaining the VAT position is extremely complicated.
Without the right VAT regulations, regular ERP systems fail to process data correctly, risking incorrect calculation of VAT, failure to comply with local VAT obligations, and transactions that cannot be commercially executed”, Richard Cornelisse, Director Strategy & Sales of Taxmarc™ emphasizes.
“The standard functionality of SAP is insufficient for ensuring the correct VAT determination. In actual practice, these flaws in SAP are often patched up in order to keep the system running. Taxmarc™ basically creates a bypass in SAP, thereby building on the standard functionality and infrastructure of SAP, but we are adding extra ‘brain capacity’.”
Real-time fiscal monitoring
Taxmarc™ provides a Tax Control Framework integrated in SAP. This framework ensures that transactions that do not comply with tax laws are automatically blocked.
Beside the highly improved preventive controls regarding risk management, Taxmarc™ underpins more efficient business processes and increased productivity.
It enables a substantial reduction of the working hours and resources that are spent on the regular manual tax return process, as well as centralization of local compliance functions (Shared Services Centers).
No more interventions afterwards
Taxmarc™ has been implemented by multiple renowned multinational companies, including AkzoNobel, Sigma Aldrich, ASM International, Fujifilm and ExxonMobil.
“Our business model is extremely complex, especially with regard to VAT. We’re operating worldwide with many (chain) transactions that go across the borders and therefore we often have multiple VAT registrations per legal entity.
Using the standard settings in SAP, automatic VAT determination of individual transactions was not possible,
Taxmarc™ has enabled automatic VAT determination of all transactions for our company.
Taxmarc™ identifies real-time when certain transactions are not possible, for instance because a local VAT registration is missing.
Improbable and atypical results are immediately visible and can instantly be corrected, so corrections afterwards can be prevented.”
Client references are important and can be provided. It is your way to validate that we indeed keep our promise.
Taxmarc™ is investigated by a Big4 organization and is qualified as the best VAT quality solution for the complex business models of customers.
Functionality of Taxmarc™
The standard VAT functionality of SAP is far from optimal. Partly due to this reason SAP offers a certain degree of flexibility within the system, which enables users to apply adjustments in order to customize SAP for their organization.
Previously this was known as ‘user exit’ and nowadays as enhancement points or enhancement implementation.
It offers users the possibility to add functionality and that is exactly what is accomplished with the implementation of Taxmarc™.
Taxmarc™ enables, by drawing upon 30 parameters, – without extra interface – a fully automated VAT determination of all (chain) transactions in SAP.
Taxmarc™ incorporates VAT relevant data of all (chain) transactions between legal entities in order to ensure the correct VAT determination.
SAP exclusively focuses on transactions within a single company; it only assesses the underlying individual transactions and fails to link the current transactions to the VAT results of previous transactions.
As a consequence, companies with VAT registrations in different countries cannot automatically comply with all VAT obligations.
Real time assessment
Taxmarc™ ensures that VAT relevant information is collected and added on client level. This is the highest level within the hierarchy of SAP in which legal entities are defined. Taxmarc™ distinguishes itself from regular ERP systems like SAP as it incorporates source data from different databases of organizations.
The VAT relevant information is subsequently entered into a decision tree, which, based on real time data, determines the VAT treatment or blocks the transaction automatically when it cannot be categorized or validated.
Taxmarc™ operates on the basis of tables that can be time-dependent defined, which has the advantage that the structure of tax codes for fixing prices is also maintained when tax rates change.
Because of this, Taxmarc™ enables – in contrast to Native SAP and external VAT managers that operate through an interface – independently and on the basis of real-time data the VAT determination of complex chain transactions.
Moreover, an upgrade of SAP does not affect the functioning of Taxmarc™, neither for incoming, nor for outgoing invoices.
Taxmarc™ can be implemented in the different recent versions of SAP (R/3 and ECC).
- Taxmarc™ prevents that time-consuming manual processes outside of the system are necessary. The virtual VAT manager allows the following operations in SAP to be executed automatically – without extra interface:
- fully automated VAT determination of outgoing invoices (AR) on the basis of 30 parameters instead of the 4-8 parameters in standard SAP;
- fully automated VAT determination of all incoming invoices (AP);
- fully automated VAT determination of all chain transactions in SAP;
- an integrated Tax Control Framework ensures that transactions that fail to comply with fiscal requirements are automatically blocked. This makes a reliable procedure available to efficiently and effectively complete transactions in accordance with business objectives;
- the existing (optimized) tax code structure is also maintained in the future, which makes it no longer necessary to create new VAT codes when tax rates change.
- validation process of VAT numbers in SAP
- is currently running in more than 35 jurisdictions worldwide (including US).
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ABAP, Account Payable, Accounts Receivable, analyses, AP, AR, Audit, business models, chain transactions, complexity, compliance, cost reduction, Data, data analysis, Data Dump, data governance, data-analytics, document numbers, Enterprise resource planning, ERP, extraction of data, fiscal requirements, improvement measures, internal control, manual, manual processes, month, opportunities, performance software, Process, quality, quality assurance, quarter, reward, richard cornelisse, risk analysis, risk-oriented analysis, risks, runtime limits, SAP, SAP AG, SAP environment, standard, system, Tax Control Framework, taxmarc™, taxmarc™ Data Analytics, taxmarc™ Tax Engine, time-consuming, Validation process, Value-added tax, VAT, VAT decisions, VAT determination, VAT determination logic, VAT return, year
In Audit Defense, Business Strategy, EU development, Indirect Tax Strategic Plan, Processes and Controls, Technology on 07/02/2013 at 11:38 pm
By Richard Cornelisse, Director Strategy & Sales van Taxmarc™
In making VAT decisions, companies are entirely dependent on the underlying ERP system of the employees who manually process data in the system.
Data analysis can be used to check whether these decisions are legitimate. Such analyses can comprise all transactions in a specific period – year, quarter or month.
The results of a data analysis can provide insight into the risks or opportunities regarding the possibility of having paid too much or too little VAT.
Taxmarc™ Data Analytics can contribute to improving business performance as follows:
- Cost reduction: by identifying potential cost savings and limiting expenses (for instance by tracing VAT that was erroneously not deducted)
- Risk analysis: tracing incorrect VAT determination or reporting incorrect returns
- Compliance: by identifying possibilities to improve the quality and efficiency of internal control
Traditional data analysis
Data analyses of other market players are generally standard analyses that are generated by a Data Dump from SAP. Extracting data from a SAP environment is often not possible due to lack of the proper authorization.
Moreover, the extraction of data is limited to a specific number of document numbers per extraction. This requires the same extraction to be executed over 30 times when an extensive amount of data is to be retrieved.
Retrieving data in multiple steps brings the risk of the format of the data not always being identical. As a result, there are no unequivocal results available and many manual adjustments are necessary.
In the case of extensive data, SAP often breaks off the analysis, because runtime limits are exceeded.
In addition, due to restriction of the size of reports in SAP, created data files cannot always be copied to a pc. Solely standard analyses are possible, which does not sufficiently take into account the complexity of business models and specific risk domains.
Benefits of Taxmarc™ Data Analytics
Taxmarc™ Data Analytics is derived from Taxmarc™ Tax Engine. Therefore, risk domains are specifically salient. Knowledge for enabling fully automated VAT determination and building an integrated Tax Control Framework is crucial in data selection.
Taxmarc™ Data Analytics only retrieves the VAT relevant data that are necessary for this analysis. This is done on the basis of a self-written SAP program (ABAP), so the data can be extracted from SAP in a uniform manner.
With this, problems regarding performance, format of reports and interpretation of data definitely belong to the past.
Taxmarc™ Data Analytics is – just as Taxmarc™ Purchase Engine – a derivative product of Taxmarc™ Tax Engine. Therefore this tool is much more effective than comparable solutions.
Taxmarc™ Data Analytics guarantees the quality and integrity of data by means of:
- Profile analysis of the most important data fields in order to ascertain whether these comply with the applicable business regulations
- Identifying the source of the problems regarding data quality and implementing the appropriate improvement measures
- Development and implementation of improved data governance and quality assurance
- Adding new attributes to existing data, so uniform and risk-oriented analysis is possible.
- Combining information from different sources within the ERP system and analyzing this in conjunction
- Using standard audit and performance software
Taxmarc™ Tax Engine adds brain capacity to SAP and enables companies to comply with all VAT obligations
- Taxmarc™ prevents that time-consuming manual processes outside of the system are necessary. The virtual VAT manager allows the following operations in SAP to be executed automatically – without extra interface:
- fully automated VAT determination of outgoing invoices (AR) on the basis of 30 parameters instead of the 4-8 parameters in standard SAP;
- fully automated VAT determination of incoming invoices (AP);
- fully automated VAT determination of all chain transactions in SAP;
- an integrated Tax Control Framework ensures that transactions that fail to comply with fiscal requirements are automatically blocked. This makes a reliable procedure available to efficiently and effectively complete transactions in accordance with business objectives;
- the existing (optimized) tax code structure is also maintained in the future, which makes it no longer necessary to create new VAT codes when tax rates change.
- Validation process of VAT numbers in SAP
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Business model, business process, calculation, China, client needs, complex, components, cross-border, drop shipment, ERP system, fiscal monitoring, GST, hard-coding, India, Indirect tax, Indirect Tax Consultant, intercompany, low-wage countries, mismatch, native SAP, parameters, pre-defined configuration, preventive controls, productivity, profits, real time, richard cornelisse, SAP, SAP AG, SAP framework, solution, Tax Control Framework, taxmarc™, Value-added tax, VAT, VAT determination, VAT obligations
In Audit Defense, Benchmark, Business Strategy, EU development, Indirect Tax Strategic Plan, Processes and Controls, Technology, Training, VAT planning on 06/02/2013 at 6:39 pm
Richard Cornelisse, Director Strategy & Sales of Taxmarc™
The business models of many enterprises have radically changed over the last years and have become increasingly complex.
SAP, however, has failed to keep up, which has resulted in the standard functionality of SAP being no longer sufficient for complying with VAT obligations. Practical solutions must be found within the flexibility and static structure of SAP regarding indirect tax.
Because of this, SAP Indirect Tax Consultants in the market can only patch up the existing SAP framework. Regarding indirect tax, the structure of native SAP has hardly, if at all, changed over the last 20 years.
As a result of globalization, the business models, on the other hand, have considerably changed.
With the aim of creating new sales markets and achieving cost savings, business activities are spread all over the world.
Cross-border chain transactions with third parties or within a company (intercompany transactions) have become the rule rather than the exception.
Nontransparent mix
This results in a highly diverse mix of transactions in which drop shipments – deliveries to the final customer of the purchasing party – are often the main point of focus. Transactions between different international stock locations of one and the same legal entity (plants abroad) take place more and more often.
At the same time, cost considerations lead to a high degree of centralization of administrative functions, whereby compliance and purchase more frequently take place via Shared Service Centers. Many companies also deal with the outsourcing of the production of parts and components of the final products to mostly low-wage countries such as India and China.
Enterprises set up their business models and transactions in such a way that they can allocate the profits in the fiscally most beneficial way. The advantage of this is a low tax burden for the corporate tax. The indirect tax is typically late, if at all, incorporated in this fiscal strategy.
The consequence of worldwide business practices, the emerging complexity of business models and the centralization of financial functions is that companies get VAT obligations in multiple countries. Combined with the lack of harmonization of regulations in different countries, maintaining the VAT position is extremely complicated.
Without the right VAT regulations, regular ERP systems are not able to process data correctly, thereby risking incorrect calculation of VAT, failure to comply with local VAT obligations, and transactions that cannot be commercially executed.
From emergency patches to eliminating risks
Automatic determination of VAT obligations in chain transactions is not possible in the standard functionality or regular ERP systems, such as SAP. This is due to the fact that essential tax parameters are missing and that it is not possible to link the different transactions in the entire chain (sale-purchase-sale). In actual practice, these flaws in SAP are often patched up in order to keep the system running.
These emergency patches usually focus solely on one specific problem instead of the entire flow of goods within the company or concern. In that case, the emergency patch is a pre-defined configuration (hard-coding) of assumptions about how transactions will take place. This entails definitively prescribed VAT determination and the risk that this might not match reality.
A delivery from a different stock location in a different country or from a different supplier then results in an incorrect VAT determination. These risks can be eliminated by adding missing tax parameters and linking master and transaction data of all relevant transactions to each other. This paves the way towards automatic determination of VAT obligations.
When this is combined with a Tax Control Framework for real time fiscal monitoring of transactions, companies can eliminate VAT risks.
Beside the highly improved preventive controls regarding risk management, they lay the foundation for more efficient business processes and increased productivity.
And then we’re actually talking about Taxmarc™.
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audit trail, backfire, Belgium, Cornelisse, Croatia, Data, data analysis, data consistency, data quality, data request, downturn, electronic format, EU, European Union, Ferry Geertman, Finland, France, Germany, Hoogeveen, Indirect tax, KEY group, KPIs, Lithuania, Luxembourg, Malta, mandatory, Norway, OECD, Organisation for Economic Co-operation and Development, Portugal, Portuguese requirement, pre-audit, real-time basis, remediate, required data format, richard cornelisse, risk appetite, risk assessment, robbert hoogeveen, SAF-T, SAFT-PT, Singapore, Slovak Republic, Slovenia, Spain, Standard Audit File, Standard Audit File –Tax, standard tax audit methodology, Tax, tax accounting, tax authorities, tax controversy, tax position, tax risks, tax strategy, taxpayer, trend, UK, Value-added tax, VAT, verify, worst case scenario
In Audit Defense, Business Strategy, EU development, Indirect Tax Strategic Plan, Macroeconomic effects of VAT, Processes and Controls, Technology, Training on 29/01/2013 at 9:59 pm
By Ferry Geertman, Managing Director of the KEY Group
Robbert Hoogeveen and Richard Cornelisse blogged about the’ new requirement for submission of tax report with transaction details in Portugal (SAFT-PT)’.
This blog provides some background from a tax controversy perspective.
The OECD has issued in May 2005 a guidance note on the development of Standard Audit File –Tax (SAF-T) and recommends the use of SAF-T as a means of exporting accurate tax accounting data to tax authorities in such way that can it can be analyzed easily.
Portugal has now – as stated by Hoogeveen and Cornelisse earlier – implemented this guidance per January 1, 2013.
On monthly basis, companies are obliged to submit the SAF-T (PT) reports for sales invoices to the tax authorities. Besides the SAF-T (PT) requirement there is also a Portuguese requirement to implement a digital signature for all sales invoices.
From a risk management perspective mandatory data filing should give food for thought.
The submission of the SAF-T file means that a taxpayer has to provide specific data to the tax authorities every month.
From a tax controversy strategy it is common practice that before information is provided to the authorities, a company performs a risk assessment and determines the worst case scenario to avoid unforeseen tax risks. What if there are glitches in your data, input errors, empty fields, awkward descriptions in fields or apparent inconsistencies?
A checklist re submitting data to the tax authorities:
- Have you analyzed the data and performed a tax risk assessment?
- What are the tax authorities doing with this data: perform data analysis?
- Does not meeting the requirement result in a higher risk of a tax audit?
- What are the KPIs of the tax authorities?
- If not impacting the present does the company show a audit trail that can be retroactively be investigated and backfire to tax position taken (ammunition for contra arguments, increase of penalties)
- If the data provided does not meet the required data format could this result in a higher risk of a tax audit?
- To avoid unforeseen risks or mitigate this risk is it not necessary to perform a data analysis prior to submitting data, as an internal pre-audit?
Data analysis as a pre-audit should be aimed at detecting and correcting inconsistencies and evaluating tax falls within the company’s risk appetite. More importantly, if similar data requests are becoming a common practice of the tax authorities, is it from a tax strategy perspective not important to set up a continuous monitoring process that on a real-time basis verifies and remediates data quality and data consistency?
- Is the mandatory data request approach of the Portuguese tax authorities incidental or will this become a future trend?
- Is it not likely in the downturn economy that more countries will follow this in order to maximize tax revenues?
- What is the current status in the European Union or beyond?
In Austria it is also mandatory to provide data in electronic format. It looks like in France this will be introduced per January 2014.
In Luxembourg, Norway, Singapore and Canada providing data is still on a voluntary basis and only mandatory upon request by the tax inspector.
In Belgium, Slovak Republic, Germany, Spain, Malta, Finland, UK, Slovenia, Croatia and Lithuania discussions on implementing SAF-T are already taking place.
Based on the above it is likely that tax data analysis is or will be the standard tax audit methodology.
Are you ready for change?
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director strategy and sales, GST, Indirect tax, Marc van Rijbroek, richard cornelisse, SAP, SAP AG, taxmarc™, Value-added tax, VAT
In Business Strategy, Indirect Tax Strategic Plan, Processes and Controls on 24/01/2013 at 8:34 am
BY RICHARD CORNELISSE, DIRECTOR STRATEGY AND SALES TAXMARC™
Marc van Rijbroek is CEO of Taxmarc™ and member of the Advisory Board of the KEY Group.
Taxmarc™ is the main brand and is divided into four sub-brands:
Taxmarc™ Tax Engine can independently determine the VAT handling of all transactions within an organization based on the available data and is also equipped with an integrated tax control framework.
Taxmarc™’s strength lies in Marc van Rijbroek’s expertise in SAP and Indirect Tax.
In creating Taxmarc™, research was conducted at various multinationals into the type of SAP functionality that should be available within the framework of their complex business models in order to have the VAT handling determined for all transactions within their business (both incoming and outgoing) in a fully automatic fashion.
This analysis showed that this goal cannot be achieved with the standard SAP functionality. Instead of developing an external solution (external tax engine), Marc chose to improve the Indirect Tax functionality using the possibilities within SAP (enhancement points/user exits).
Extra brain capacity was added that allowed for efficient and automatic VAT handling determination within an organization for all transactions – without fixed assumptions.
The development process took more than 12 years and was tested and successfully implemented at numerous multinationals over the years.
Taxmarc™ also contains a SAP-integrated VAT/GST Control Framework, so that illogical results are immediately apparent and can be managed in real-time to prevent corrections after entry.
The next step was to create the fully automated VAT handling of incoming invoices (AP), not only inter-company, but also from third-party suppliers.
Thanks to this functionality, it is now possible to combine information from the SAP purchase orders with relevant information from the purchase invoices.
The VAT is calculated and validated automatically in compliance with the applicable fiscal requirements.
The same tax engine functionality is used in our data analysis.
This enables us to quickly create a blueprint of the company model, together with risks and potential savings.
As a result, Taxmarc™ is more advanced in terms of SAP than any other product on the market.
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compliance, determination logic, director strategy and sales, Enterprise resource planning, Indirect tax, interface, Marc van Rijbroek, oblgation liability, parameters, richard cornelisse, robbert hoogeveen, SAP, SAP AG, standard functionality, Tax Control Framework, taxmarc™, transaction, Value-added tax, VAT
In Uncategorized on 22/01/2013 at 1:38 pm
Taxmarc™ Leadership
(l2r) Robbert Hoogeveen Director Technology, Richard Cornelisse Director Strategy & Sales, Marc van Rijbroek CEO of Taxmarc™
For virtually every company the efficiency of compliance with local VAT regulations depends entirely on the functionality of the underlying ERP system, such as SAP.
However, determining the VAT liability and recovery in these systems is only partly automated.
As a result, companies risk incorrect calculation of VAT, failure to comply with the local VAT obligations, or transactions that cannot be commercially executed.
In actual practice, these flaws are often patched up in order to keep the system running.
Taxmarc™ creates a bypass in SAP, thereby building on the standard functionality and infrastructure of SAP, but adding extra ‘brain capacity’.
By drawing upon 30 parameters instead of the 4-8 in standard SAP, Taxmarc™ enables – without extra interface – a fully automated VAT determination of all (chain) transactions.
Moreover, Taxmarc™ provides a Tax Control Framework, which ensures that transactions that do not comply with tax laws are automatically blocked.
Hereby Taxmarc™ offers an effective tool that facilitates efficient deployment of employees and optimal risk management regarding indirect tax.
Taxmarc™ is investigated by a Big4 organization and is qualified as the best VAT quality solution for the complex business models of customers.
BY RICHARD CORNELISSE, DIRECTOR STRATEGY AND SALES TAXMARC™
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compliant, configuration, Corporate tax, digital signature, February 8th, implementation, Invoice, IT resources, Law-Decree nº 198/212, Portugal, Portuguese, Portuguese language, practical, requirement, richard cornelisse, robbert hoogeveen, SAFT-PT, SAP, SAP AG, SAP system, solution, submission, TA Instruction, Tax, tax report, tax revenues, transaction details
In Audit Defense, EU development, Processes and Controls on 19/12/2012 at 8:57 pm
By Robbert Hoogeveen and Richard Cornelisse of the KEY Group
This blog is about making you aware of a new requirement in Portugal that could impact your SAP system configuration.
We believe that it is a very complicated change that will require a lot of IT resources.
You could ignore this blog in case your company does not have a legal entity that is subject to Portuguese Corporate tax. In that case the described new requirement is not applicable to you.
The requirement in Portugal for the submission of the so-called SAF-T PT reports has been changed recently.
The submission of SAFT-PT files to the Tax Authorities was not mandatory and the SAFT-PT should be available when requested.
At the end of August 2012 was published the Law-Decree nº 198/212 that predicts the submission of all the invoicing details in a monthly basis as a new monthly tax compliance obligation for the company that should occur until the day 8 of the following month (the first one is on February 8th).
This will be extended most likely to day 25 of the following month.
Only in the week of November 12th Tax Authorities clarified this Law-Decree giving the companies guidance for being compliance with the new legislation.
There is a standard SAP transaction to create the so called SAFT-PT files but based on our analysis, see attached document SAFT PT practical solutions for implementation, we believe that it will be very challenging to implement a full working solution in SAP before January 2013.
Especially because most SAP environment will be in the “freeze” status due to year end closure.
To be compliant for tax in Portugal it are challenging times. Besides the SAFT-PT requirement there is also a requirement to implement a digital signature for all sales invoices in Portugal.
We are curious how your company evaluates the risks of not meeting the Portuguese data request and whether it is likely that this provides the authorities a reason for a tax audit.
Our gut feeling says that this is of a higher risk level nowadays as countries as Portugal are using all kinds of methods possible to increase tax revenues in order to combat their deficit, but also depends on the local relation with the tax authorities of course.
- Tax Authority Instruction to comply with Decree-Law 198 2012
- SAFT PT practical solutions for implementation
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2013, accuracy, acquisition, additional costs, AP, AR, Arjan Hassing, automated, automatically, blocked, Business model, calculate, chain transactions, compliance, configuration, Control, cost reduction, cross-border A-B-C transactions, cross-border transactions, currencies, determine, double payments, effective communication, efficiency, electronic interface documents, Enterprise resource planning, ERP system, errors, excel, exchange rate, financial, framework, free up, functionality, go-live, iDoc, iDocs, import, Indirect tax, indirect tax automation, indirect tax objective, Indirect Tax Trends, instructions, invading, Invoice, invoicing requirement, January 1, KEY, KEY group, logistics, malfunctions, man-hours, manage, manual activities, manual adjustments, OBCD, Plug and Play, priorities, processes, purchases, report, resources, reverse charge, richard cornelisse, risk tolerance, risks, robbert hoogeveen, SAP, SAP consultants, SAP review, SAP settings, Shared Service Centers, shortcomings, solutions, systems, tax code structure, tax engines, Tax Professional, tax specialists, tests, Transactions, Value-added tax, VAT, VAT amount, VAT rate, VAT registration number, VAT treatment, workforce
In Business Strategy, Indirect Tax Strategic Plan, Processes and Controls, Technology, VAT planning on 20/10/2012 at 7:56 pm
(In Dutch)
For nearly every company, the accuracy and efficiency of local-country VAT compliance is nearly completely dependent on the functionality of the underlying ERP system.
Operational malfunctions in a system that is used to manage VAT compliance can lead to substantial financial risks.
There are countless examples of the mismatching of VAT treatment of purchases and sales in chain transactions, double payments of VAT and “forgotten” manual adjustments to the VAT filing, all attributable to shortcomings in SAP’s automated VAT solution.
Errors in the basic VAT configuration of ERP systems can also carry consequences for an organization. Without the proper VAT rules, many systems are incapable of processing transaction information correctly, so that transactions may become blocked. This has a great impact on logistics processes, invoicing processes and financial processes.
Tax and financial departments are under increasing pressure to reduce the costs of compliance processes. One result of this is the increasing transfer of VAT-relevant processes from national tax supervision to Shared Service Centers. These Shared Service Centers are not generally manned by tax specialists. They trust the functionality of the group’s ERP system to determine, calculate and report local VAT.
Our added value is that we help clients free up resources, reduce manual activities and manage risks.
Distinguishing capability
The KEY Group possesses considerable practical experience and understands SAP’s possibilities, but also its limitations.
With respect to the possibilities, we can express the wishes to the external SAP consultant in his own language and we can demonstrate how these can actually be achieved in SAP. In practice, we note that certain functionality intended for the support of indirect tax objectives does not get used – due either to reluctance (not within budget) or to a lack of knowledge in this area.
From an indirect tax standpoint, the realization that you are part of a larger team in which each of the participants has other priorities is key. This means that effective communication and agreements are essential. Instructions must be understandable and so short and compact that they can also be used as a reference framework and material for the tests.
In practice, Excel is often used to record all transactions and to indicate what the VAT treatment, etc., should be for each transaction individually. This cannot be imported and is difficult to evaluate for this reason. Moreover, the use of Excel carries the risk of making copy/paste errors.
The question is: what is the best format for providing instructions to other work streams and for making the test phase efficient and effective? It turns out in practice that decision trees are a particularly effective communication resource with the IT consultant. In addition, an SAP implementation is not “Plug and Play.”
SAP has its limitations and not all transactions can be implemented in the systems in an automated fashion.
For example, in the standard configuration, it is not always possible to have SAP automatically determine the VAT treatment of chain transactions within a concern or with third parties (3 parties or more).
One of the solutions is to work with assumptions and to implement these in the system. This means that a VAT treatment is no longer deduced using information present in the system.
Assumptions may be incorrectly implemented during the actual execution or may undergo a change after “going live.” An incorrect VAT treatment is the potential risk.
The advisor should be asked which functionalities are available in the market for still achieving full automation without making use of assumptions.
If this solution is selected, periodic audits are still essential since the risks exceed the company’s risk tolerance. This results in extra man-hours, representing additional costs.
As of January 1, 2013, invoicing requirements will be harmonized and the legal objections of practical thresholds will be removed. From an SAP perspective, there is still an important battle to be fought for the system’s processing of VAT.
From within the standard SAP settings, how do you get iDocs/OBCD to handle VAT treatment automatically? For complex business models with VAT registrations in various countries, SAP’s standard iDoc/OBCD design does not allow the derivation of the proper tax code for AP for cross-border transactions. In which countries should the acquisition be reported? This is another question to ask the adviser.
The indirect tax objective of an SAP implementation should not be only that everything functions at the moment of “going live,” but that the maintenance and logic of the structure and the persistence of that logic in case of changes have been considered.
Example:
In a given country, tax code VI is used for the standard VAT rate at the moment of “going live.” This means that a print can be made of the standard VAT rate used in various countries using the simple tax code selection, essential for monitoring the function and for the selection of the proper tax code for AP coding.
If a rate increase occurs, a tax code for the new standard rate must be created – VD, for example – one that deviates from the chosen standard. VAT rate increases are a worldwide trend and the result is that the logic of the tax code structure will no longer be present after the increase. This increases the chance of errors when selecting the correct tax code.
So the question is: how do you implement the rate changes in SAP without this having an impact on the logic of your tax code structure?
Examples of possible errors in SAP
- Not making use of the proper partner functions in SAP for a supplier who provides services in multiple countries and invoices VAT locally. Result: the standard VAT calculation generates incorrect results.
- Missing/improper VAT registration numbers in customer master data, such that invoicing requirements are not satisfied for cross-border transactions.
- Master data is adjusted and tested in the test environment, but the changes are not included in the final upload to the production system.
- The logic of the tax code structure is disrupted by VAT rate changes, something that could have been prevented using the SAP configuration.
- When performing reverse charge bookings, VAT rate changes do not get changed.
- For cross-border A-B-C transactions, a VAT mismatch between the VAT on procurement and the VAT on sales arises for party B.
- Blocked so-called iDoc (electronic interface documents) because of errors in the OBCD design.
- Suppliers with invoices in other currencies and the VAT amount in Euro, so that the booked VAT amount is incorrect due to an incorrect exchange rate.
- Incorrect derivation of VAT registration numbers for cross-border transactions caused by incorrect SAP configuration.
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Audit, Budget, control measures, control method, Corporate tax, data analysis, enhanced relationship, financial crisis, Fiscalis, Fiscus, global, GST, horizontal monitoring, horizontal supervision, income tax, Indirect tax, indirect tax management, Indirect Tax objectives, indirect tax revenue, KEY group, liability, Netherlands, normative framework, OECD, priority, problem statement, richard cornelisse, risk management, risks, sampling, savings, Senior Accounting Officer, sign off, sponsorship, statistical sampling, Tax, tax bill, Tax Control Framework, tax strategy, trends, Value-added tax, VAT, VAT audit, VAT RATES
In Audit Defense, Benchmark, Business Strategy, EU development, Indirect Tax Strategic Plan, Processes and Controls, Technology on 19/10/2012 at 10:24 am
(Dutch version) There is a global trend toward increasing VAT rates and broadening the grounds for charging VAT. Governments increase their tax revenues in this way as a measure of combating increasing budget shortages due to the financial crisis and/or for financing the reduction of direct taxes (corporate tax, income tax, etc.).
Since indirect tax revenues rise in comparison with total tax revenues, the tax authorities pay more attention to indirect taxes than they did previously. After all, there’s more to be gotten here – resulting in a higher priority.
There is also large-scale VAT fraud within the European Community. Actively combating VAT fraud is a priority for the European commission and local governments. New measures are being taken such as the introduction of individual liability for not remitting VAT if the buyer knew or should have known that he was buying from a fraud. To prevent such a condition of liability, the ability to demonstrate that sufficient control measures have been taken is essential.
In the Netherlands, the tax authority often uses statistical sampling as a control method during a VAT audit. The severity of the additional tax bill is determined based on the number of errors found.
Foreign tax authorities cooperate intensively in the Fiscalis program. The Fiscalis program will be continued under the name of Fiscus and has a budget of 770 million for the period between 2014 2020! Knowledge in the area of risk management is shared actively.
Data analysis is known to be used for rapid insight into exactly where the risks lie and what the quantitative impact is of these risks. In this way, the tax authority can perform its audit of the books in a more directed manner. Compared with sampling, data analysis has the benefit of no longer missing a significant treatment error.
Data analysis is already used in a number of countries. It is expected to become a standard audit method in the near future.
Both data analysis and sampling can be used by multinationals as a pre-audit to test the functioning of the tax control framework.
There is, namely, an expectation that tax authorities will start testing the tax control framework for its adequate functioning in the future. In the Netherlands (horizontal supervision aka horizontal monitoring) and England (Senior Accounting Officer sign-off), there are examples of such initiatives.
The OECD also promotes such ’enhanced relationship’ between tax authorities, taxpayer and advisers, where ex post facto audits may be limited by instituting both a proactive and a cooperative relationship with the tax service.
The aforementioned developments are extra reasons to give the right priority to indirect tax management and to formulating annual indirect tax objectives as part of the company’s tax strategy.
It is essential here that the tax function also be empowered to actually achieve these objectives.
The KEY Group has developed normative frameworks and applications that not only provide rapid insights into the risks and savings opportunities but that also quantify them. By writing a problem statement, the reporting method optimizes senior management’s sponsorship.
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