Definitive VAT system scheduled for 2022

 Posted by Nazar Zaidi

 Tuesday 18 September 2018

Many businesses will be aware of the planned reforms to the EU VAT regime scheduled for the start of 2022. The so called Definitive VAT system will necessitate fundamental change to the VAT set-up of businesses involved in cross-border EU supply chains. 
Indeed this will be the most significant change to the EU VAT regime since the 2010 VAT package. And for businesses who are involved in goods movements across the EU it is likely to have a much greater impact. 
In addition to the 2022 changes, businesses will also need to reckon with the so-called Quick Fixes (due in 2019) as well as the impact of Brexit with the UK likely to become a third country (from an EU VAT perspective) in 2021. 
Realistically many businesses will struggle to adapt the VAT determination setup within their SAP system in line with the proposed changes. This will particularly be the case for businesses who have in place a highly customized but inflexible VAT configuration set-up which has been designed over many years in a piecemeal fashion. 
The best performing VAT teams will be reviewing, as we speak, the SAP VAT configuration within their businesses. They will pro-actively identify complexities and inefficiencies within their VAT configuration and where necessary adapt the set-up so that it is more flexible and future proof. By taking such pro-active steps, such businesses will have a considerable head start when it comes to implementing the above changes in a way that minimizes disruption to other parts of the business. 

Tagged: EU VAT
Streams: EU VAT Updates

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