Plants Abroad

125 Pages·2013·2.64 MB·English

by  Jayne Williams

Welcome to the Financial
Excellence Stream
Sponsored by:
Configuring SAP for European VAT – Implementation tips and tricks from the experts

Birmingham
26 November 2013
Speakers Your Speakers
Roger Lindelauf
Director ERP VAT Consulting
Meridian Global Services
Ryan Ostilly
Commercial Director – Tax Technology
Meridian Global Services
11/29/2013 © 2013 Meridian Global Services. All rights reserved. 3
Agenda
Part 1 : 10h45 – 11h30

 How to automate typical, complex VAT flows in SAP
 Introduction to tax determination in SAP
 Case 1: Drop shipments
 Case 2: Triangulation
 Case 3: Customer pickups (EXW deliveries)
 Tip: Avoid complexity in condition records
 Case 4: Services

Part 2 : 11h35 – 12h20

 Plants Abroad – a step by step implementation guide
 Automating VAT determination on AP invoices (PO’s and IDOCs)
11/29/2013 © 2013 Meridian Global Services. All rights reserved. 4
Workshop Objectives
What we will present:
 Day-to-day, simple business flows, that occur in your organisation
 Executed in a standard SAP system
 Revealing some of SAP’s shortcomings in VAT determination
 Presenting possible solutions to overcome these

What we aim to achieve:
 Discover where and why standard SAP will not correctly determine VAT
 Apply this knowledge to your business and assess impact
 Discover ‘best practice’ solutions to overcome these challenges

11/29/2013 © 2013 Meridian Global Services. All rights reserved. 5
Agenda
Part 1 : 10h45 – 11h30

 How to automate typical, complex VAT flows in SAP
 Introduction to tax determination in SAP
 Case 1: Drop shipments
 Case 2: Triangulation
 Case 3: Customer pickups (EXW deliveries)
 Tip: Avoid complexity in condition records
 Case 4: Services

Part 2 : 11h35 – 12h20

 Plants Abroad – a step by step implementation guide
 Automating VAT determination on AP invoices (PO’s and IDOCs)
11/29/2013 © 2013 Meridian Global Services. All rights reserved. 6
Introduction to VAT determination in SAP
A short background:
• SAP designed tax determination logic over 25 years ago
• Back then, VAT was a relatively simple tax:
– VAT treatment on most EU cross-border trade of goods treated as ‘exports’
– Little concept of cross-border VAT registrations
– No Intra EU exemptions, simplifications, triangulation, Intrastats , EC Sales lists, etc.
– No requirement for ‘Plants Abroad’ for intra-company, cross-border stock movements
• But the world has since changed:
– EU VAT rules and disclosure requirements have changed significantly and regularly
– Businesses have become more international
– Migration to common ERP platforms and standards
– Supply-chain and corporate restructuring is common practice
– Greater focus on indirect tax compliance
• Tax logic in SAP has not changed fundamentally in 25 years
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Standard SAP: Output VAT determination
Basic characteristics for output tax determination
 Based on ‘Tax Departure Country’
Tax
 Based on ‘Tax Destination Country’
Departure
Country
 Classification of your customer Tax
Material Destination
(liable, not liable, same fiscal entity, etc)
Country
Customer
 Classification of your material
(high, low, zero rated, service, etc)
VAT ID
 VAT registration number Master Data
(EU relevant)
Access Sequence
Logic engine
Condition Records
Tax treatment (VAT code)
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Standard SAP: Output VAT determination
Tax condition records
Access sequence (simplified)
Cross border transaction ?
or
Domestic transaction ?
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Standard SAP: Output VAT determination
Tax condition records
Departure Destination Customer tax Material tax Validity Tax Tax code
country country class. class. period %
+ + + + = Tax code + %
If one of the characteristics above is incorrect
the wrong tax rule and percentage will be determined
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