The challenge for SAP VAT determination

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‚Äôs requirements
  • VAT compliance risk associated with errors, omissions and disclosure discrepancies stemming from underlying SAP transactional data

SAP vat determination challenge

How businesses may solve the issues with SAP VAT determination

  • A complex sequence of manual workarounds may be developed over time . Where businesses 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.
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  • 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.
  • 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.

Consequences of manual determination of VAT in SAP

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.


automated vat determination for 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 SAP S/4HANA systems from on premise to cloud
  • The first and only European certified tax determination solution for SAP Business Technology Platform

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

Full SAP VAT determination

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

SAP Business Technology Platform application

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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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