Automated Tax Determination For SAP

Fully compliant and automated tax processes for SAP systems

The challenge

More and more multinational businesses have European operations with complex cross-border flows and multiple foreign VAT registrations. However, SAP is often unable to handle the complex VAT rules and associated reporting requirements faced by such businesses.

Increasingly, we see tax and finance staff experiencing issues such as:

  • Significant man-hours devoted to checking and validating transactional data
  • The need to develop bespoke reports either to correct errors or format VAT-return data according to each tax authority’s requirements
  • VAT compliance risk associated with errors, omissions and disclosure discrepancies stemming from underlying SAP transactional data



vat determination solutions





complex vat determination

How businesses may solve these issues

  • A complex sequence of manual workarounds may be developed over time . For example, businesses often develop bespoke access sequences together with a complex set of condition records in order to try and derive a complex VAT decision. 
  • The order management team manually changes the VAT characteristics of sales orders. This could be done to attempt to overcome a known limitation within SAP VAT determination and to try and force the correct the VAT result. This means a company may allow non-tax staff to make decisions - which is very high risk.
  • Staff need to manually recognise in SAP each EU triangulation transaction flow. As such ensuring staff correctly recognise when triangulation applies is a huge challenge. 
  • Likewise, where AP staff are responsible for selecting a VAT code on a purchase invoice, the business is effectively reliant on AP staff to be tax experts. It is often the case that the tax department has to spend further time reviewing and correcting the VAT coding on invoices applied by AP staff.

The consequences

Many businesses are forced to carry out significant manual work outside of their system in order to compile their VAT declarations. Typically, doing such work in Excel or in some cases within a bespoke database or reporting engine, this yet another symptom of underlying issues caused by inaccurate VAT determination in SAP.

Although practical when done on a small scale, such a manual approach is often not scalable for tax and finance teams responsible for multiple jurisdictions and VAT registrations.


challenge vat determination sap

The solution : Automated VAT determination for SAP

Meridian tax determination solutions solve all known limitations and shortcomings concerning VAT determination in SAP

  • Operates within your SAP system
  • No external API connections are needed
  • Can be managed by the tax deparment
  • VAT rule changes automatically updated
  • Flexible for global implementation
  • Fully compliant and automated tax processes for all SAP ECC and S/4 systems from on premise to cloud
  • The first and only European certified tax determination solution for BTP

process for automated VAT determination for SAP

Meridian Tax Determination Solutions

The VAT Add-on is an on-premise tax determination solution and is built directly into native SAP.

VAT Add-On

Overcomes all shortcomings in SAP VAT determination

On-premise solution

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Arco is Meridian's new tax determination platform, integrates easily with BTP and extends as your business grows.

Arco

BTP application for full SAP VAT determination

Supports multiple S/4 HANA on-premises and Cloud instances

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Vantage is Meridian's Service package that ensures your system is always available and meeting business requirements.

Vantage

Ensure applications are always available and 100% correct

Comprehensive product information hub

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Resources

Arco is Meridian's NEW automated tax determination solution designed for instances of SAP S/4 HANA, on-premise and cloud. The Arco application runs on the SAP BTP platform and enhances functionality of standard SAP for global VAT determination. Download the brochure.

The weakness of native SAP in multinational VAT determination may still leave the company exposed to potential errors, creating issues for tax declaration and the auditing process. There are seven key reasons why businesses should look at automating their VAT determination in SAP. Download the guide

Mondi is a leading global packaging and paper group, and being a globally diversified business, it is important for Mondi to have a reliable and correct VAT determination process using their SAP S/4 Hana system. Mondi has chosen Meridian’s VAT determination as an add-on to SAP. Read the story