Richard Cornelisse

Case study: cross-border chain transactions and the weakness of Standard SAP

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 organization of SAP regarding indirect tax. Because of this, SAP Indirect Tax Consultants in the market can only patch up the existing SAP framework.

Cross-border chain transactions with third parties or within a group of company (intercompany transactions) have become the rule rather than the exception.

Below you will find a case study re cross border intercompany transactions.

This example is representative for overall Standard SAP weaknesses from an indirect tax perspective.

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Everything You Always Wanted to Know About VAT in SAP * But Were Not Aware to Ask

If the aim of your organization is full VAT automation of AP and AR, it is important to have a clear understanding of your material risks at hand and your lowest performing processes in order to define the functional specifications for a solution.

The first step is to understand what exactly makes standard SAP not functioning optimally from an Indirect Tax perspective. Only then it is possible to validate whether companies’ objectives can be achieved with upgrading standard SAP functionality and/or implementing a tax engine?

Read more: SAP Solutions – Questions to Ask Before You Commit

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