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Tuesday 16 February 2021
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.
The immediate solution
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 or maintain.
As a general rule, if you see that your business has set up:
• More than 5 access sequence steps (in total); or has
• Over 100 condition records (per VAT jurisdiction) then this is usually a clear indication that something is not right
Download the Guide : Top 10 signs that your SAP system can’t manage EU VAT Complexity. This explains how you can see how many access sequences you have and how to print out your condition records
VAT in SAP/ERP