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Friday 12 September 2014
Based on our experience of reviewing our clients’ SAP systems across all industries and markets, we have identified the top 10 signs that indicate that your SAP system cannot handle your EU VAT requirements in a compliant and efficient manner.
#1 Your condition records don’t make sense
Many businesses know that standard SAP cannot determine the VAT treatment for many types of complex EU transactions in an automated and compliant way. The root cause is that SAP doesn’t know all the complex EU VAT rules. It is always left up to the business to “teach” SAP what the rules are.
To mitigate this, businesses often develop bespoke access sequences together with a complex set of condition records in order to try and derive a complex VAT decision.
Whilst this approach can work for specific scenarios, it usually falters as new scenarios arise either when the business changes, or new VAT rules are introduced. This may lead to further patchwork developments which create even more complexity.
Over the years, such an approach can create a highly complex and customised VAT logic that no-one is able to understand, trust nor maintain.
As a general rule, if you see that your business has set up:
Then this is usually a clear indication that something is not right.
Quick tip: Here is what you can do to see how many access sequences you have and how you can print out your condition records:
Step 1: Use transaction ‘VK13’ to display the number of access sequence steps as set-up for the ‘tax condition type’ as used within your organisation:
* Every key-combination is 1 access sequence step
Step 2: Use transaction “V/LD” to print-out the condition records including tax codes and tax percentage. If only the standard SAP access-sequence steps are used, pricelist ‘14’ can be used in transaction “V/LD”. However, if you have defined your own access-sequence steps, then the pricelist to be used needs to be customized by your SAP-SD consultant.
Step 3: Review your access sequence steps and your condition records. Do they all make sense? Are there any records that you don’t understand or don’t seem right? If something doesn’t seem right to you, then it probably is not and should be investigated.
Click here to access the full document
EU VAT Updates