Top tips from day one at SAP Control for VAT Compliance

Ryan Ostilly, Commercial Director at Meridian International VAT Consulting, and our event's co-chair, summed up the most practical pieces of advice shared yesterday by speakers and delegates.

1. Partly exempt organisations (from Lars Gartenschlager, SAP) - there is new functionality in SAP's enhancement pack 4. If any part of your business has VAT restrictions (eg, insurance, financial services), it is worth looking at this


2. Major complex VAT flows (Alexandra Vale, Chemtura Manufacturing) - spend time reviewing your document flow before implementing SAP.
   
   
   • Check inco terms to see if there is unnecessary complexity
   
   
   • Even if you're a goods company, it's worth checking as you're probably invoicing services too
   
   
   • UK has conflicting advice as to whether training is treated it under the default rule
   
   
    


3. Plants abroad functionality (John Lambourne, Philips IT Applications) - to simplify tax-code structure, consider using TAXEU procedure
   
   
   • Don't forget about daily, rather than monthly, exchange rates (eg Poland). You will need to incorporate this into your VAT reporting and will require modifications to SAP
   
   
    


4. VAT rate changes (Julian Ogden, United Biscuits) - it is best practice to create new tax codes for sales transactions (and not re-using existing codes)
   
   
   • Re-using accounts-payable tax codes might be possible, but only if you have tight visibility and control over AP and good exception handling
   
   
   • Don't forget to update automatic tax determination on your AP invoices (via iDocs)
   
   
    


5. Date of supply (Franz Pauer, Deere and Co) - there are various possibilities for determining tax dates in SAP
   
   
   • No option is 100% accurate
   
   
   • The new finance (FI) VAT date field can help
   
   
    


6. Grouping country codes - consider grouping all EU 27 member states via small user exit logic
   
   
   • Benefit - only one line has to be set up per departure country
   
   
   • This will help reduce the volume of condition records and will limit maintenance
   
   
    


7. Reconciling intrastats to VAT returns - adding FI document number to intrastat reports makes it easier to compare and reconcile to VAT reports
   
   
   • If advisors tell you this is not possible, sack them, it is!
   
   
    


8. Supplier VAT ID for EC purchases lists - validate supplier IDs for Poland, Hungary, Spain and Italy


9. Include non-stock materials on intrastats


10. Join the Meridian LinkedIn group to continue discussions on SAP and VAT.