Tax authorities, due to technological innovations, have increasingly improved their tax auditing. They collect tax data directly from the taxpayer's ERP systems periodically (SAF-T VAT), on-request (SAF-T VAT and CIT), and more real-time (e-invoicing VAT and TP).

Data is the most valuable asset for any organization. It is being generated at unprecedented speed and already drives decision-making processes and generating extraordinary value.

In Spain a new VAT reporting system will enter into force on the 1st of July 2017. The new Spanish requirements will have a huge impact on many (multi)nationals that run SAP.

Extensive VAT fraud exists globally in countries that introduced a VAT or GST system. The VAT-gap can be defined as the difference between the received and the theoretically calculated VAT-returns/GST returns.

Due to the Coronavirus outbreak, the Finnish treasury announced that the April 1, 2020 deadline is postponed. Non-central Finnish public entities and Finnish companies with turnover of over €10,000 are allowed still to issue and receive invoices use the older e-invoice formats.

Any SII Spain solution should be implemented on 1 July 2017 as the first mandatory submission is already 8 days later. There are rumours that submission deadline might be delayed but that is still a big uncertainty.

A SAP VAT configuration review can be used as a counter measurement as part of a sound tax audit defense. The outcome of such a configuration review should show where VAT errors in SAP occur.

Standard Audit File for Tax Purposes for Norway first version was ready in March 2016. It was limited to account specification (general ledger), and supplier and customer specification (subsidiary ledger).

The objective is to bring commissionaire arrangements within the framework of dependent agency PE. Companies are converting commissionaire to LRD. Once a commercial and tax-efficient structure is determined— one that addresses both historical and potential risk - it is time to take the theory behind the structure into the realm of practice.

VAT is a consumption tax. It is collected in stages by the businesses (or intermediaries) and should be borne by the final consumer. Consequently, VAT is a transactional tax with the potential to impact all transactions with suppliers and customers.

Starting September 1, Poland will publish online a new database of VAT registered businesses. It is a list of VAT payers, which contains several important information about entities conducting business activity in Poland. The list will include, among others, bank account numbers of VAT taxpayers.

Although the EU VAT regime will remain in place until negotiations between the UK and the EU will be concluded, it is most likely that new UK VAT legislation will come into force in the spring of 2019.

Hungary and Spain introduced the submission of sales e-invoice data to combat VAT fraud as a post-audit method.

From 1 January 2020, four Quick Fixes will be introduced to simplify and harmonize the EU VAT rules of intra-EU supplies of goods, that will address the vital importance of VAT number check again.

Our SAF-T SAP add-on runs over SAP ECC, is compatible with OECD standard and covers the steps of creation of necessary structures in XML format including E-submission with signature and encryption.

The change from version 2.0 to version 3.0 is not minor. Version 2.0 will no longer be accepted starting April 1, 2021. Similar to version 2.0, change requests of multiple kinds have been incorporated. 

Starting April 2020 the digitally linked VAT accounting data will have to be submitted to the tax authorities either periodically or on request. That data will be used to review whether the numbers of the nine VAT returns submitted are correct (tax audit (almost) real-time).

The Italian, Polish, Lithuanian and Spanish authorities passed a series of measures aimed at detecting and combating tax fraud.

The 'Advanced Compliance Reporting' (ACR) service enables you to configure, generate, analyze, and electronically submit statutory reports that contain indirect taxes, such as value-added tax.

We support clients by enhancing SAP for tax. That means implementing new tax audit methods such as SAF-T and e-invoicing, but also it optimizes SAP's VAT determination logic to ensure that manual intervention is limited or avoided. Below an overview of new legal changes and introductions, that KG will support.

The Italian authorities passed a series of measures aimed at detecting and combating tax fraud: "Quarterly informative report VAT invoices data".

Greece requires taxpayers to submit VAT electronic reporting. It will include invoice reporting and e-books with e-ledger details.

HMRC's 'MTD for VAT' aims to avoid 'manual entry' mistakes, and that all underlying VAT line items of the VAT return are not only digitalized but at the end readily available so HMRC can perform soon closer to real-time tax audits. We explain MTD UK in detail.

The Governments of the Gulf Cooperation Council (GCC) - Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates that make up GCC - are committed to form a common framework for the introduction of value added tax (VAT) in the region.

Malaysia's government abolished the GST Act, and from September 2018, the new Sales & Service Tax (SST) regulation is in force. In line with the new regulation requirements, organizations need to submit (quarterly) returns.

From 1 July 2018, taxpayers are as stated earlier obliged to provide immediately invoice data for domestic transactions with a minimum VAT amount of HUF 100,000 (322 EUR).

A SAF-T SAP add-on solution developed together by ‘Tax Assurance and certified SAP add-on specialists’ is now available for Poland, Lithuania and Norway.

When the rounding off set up in standard SAP conflicts with the decimal tax requirements, it would usually mean that the SAP setup has to be changed. That is a time-consuming change management process that could take months to implement.

Starting January 1, 2019, in Italy a mandatory electronic invoicing obligation will be in force for the supplies of goods or services. This e-invoicing obligation - similar like Spain and Hungary - is about detecting and combating VAT fraud/tax evasion, but also to stimulate company's to get ready for the digital age.

Besides recently Poland, SAF-T is introduced now also for Lithuania and Norway. A fully integrated solution in SAP without an external interface or use of external software is available for Lithuania, Poland and Norway. Other countries will follow.

The Indian government rolled out the electronic invoicing system for all business-to-business (B2B) transactions under the Goods and Services Tax (GST).

From 1 July 2018, taxpayers are as stated earlier obliged to provide within 24 hours invoice data for domestic transactions with a minimum VAT amount of HUF 100,000 (approximately 322 EUR).

Norway is introducing SAF-T reporting for corporate entities, either resident or with physical presence in Norway (VAT registered businesses). From 1st January 2017 onwards it is required to provide SAFT-NO files in XML format on request of the Norwegian Tax authorities.

An SAP add-on enhances standard SAP itself., SAP add-on tax components are extra functionalities that do not come with the central SAP product. Various organizations have different requirements.

Starting January 1, 2019, in Italy a mandatory electronic invoicing obligation will be in force for the supplies of goods or services.

On 16 June 2016, the Finance Ministers of the Gulf Cooperation Council (GCC) held an extraordinary meeting in Jeddah, Saudi Arabia on GCC Value Added Tax (VAT).

Hungary and Spain introduced the submission of sales e-invoice data to combat VAT fraud as a post-audit method. 

An API to HMRC is mandatory from 1 April 2019. HMRC will, however, introduce a soft landing period' until 1 April 2020. Taxpayers will, in the end, have to transfer data without manual intervention.

Tax authorities, due to technological innovations, have become increasingly better in executing their tax audit.

Under a clearance model, the tax authorities will audit sales e-invoices near real-time and first validate and approve the supplier's invoices before those invoices are sent to the customers by the supplier or the tax authorities itself.

Norway has announced to introduce an on-demand mandatory Standard Audit File for Tax (‘SAF-T’) requirement for taxpayers starting from 1 January 2020.

Our SAP add-on for SAF-T Poland runs over SAP ECC, is compatible with OECD standard and covers the steps of creation of necessary structures in XML format including E-submission with signature and encryption.

Countries have introduced e-invoicing as a clearance model or as a post-audit method. The legal format is usually an XML or JSON file.

In Portugal, in addition to the existing monthly SAF-T submission listing of all sales invoices for VAT purposes, businesses are required to provide annual accounting file in SAF-T format.

We can offer a SAP add-on solution for Poland (ABAP) at a fixed all inclusive fee. Fully integrated in SAP without an external interface or use of external software. All inclusive means implementation, training and 1 year of free support and maintenance for bug-fixes & legal updates.

Our large taxpayer clients are selected for mandatory e-invoicing in Egypt as the first wave. KG completed the development for the Egyptian SAP add-on, and the User Acceptance Testing is in the final stage before moving to the production environment.

Greece intends to roll out a mandatory application of electronic invoicing and electronic bookkeeping. For companies that are involved in the public procurement, the law will be in force as of 2019.

In Europe SAF-T is now in force in Austria, France, Lithuania, Luxembourg and Poland. We understand that Germany, UK, Ireland, Norway and the Czech Republic are most likely next to introduce SAF-T. Lithuania is expanding its SAF-T.

In Hungary, taxpayers must report the domestic purchase invoices list to NAV on a monthly base as part of the VAT return. Often this reporting requirement is a manual exercise, especially when due to threshold applicable, the number of invoices was limited.

Tax administrations use technology to improve tax audit effectiveness as combating VAT fraud is a high priority. Digitalization of tax is a trend, so more countries will follow soon.

From 1st July 2016 onwards it is required to provide SAFT-PL files in XML format on request of the PL Tax authorities. 

Over 1.4 million taxpayers are successfully using MTD for VAT. The UK will extend Making Tax Digital for VAT to all businesses below the VAT threshold from April 2022 to ensure every VAT-registered business takes the step to move to a new digital tax service.

We offer an SAP health check specifically on e-invoicing data requests such as Hungary, Italy and Spain and our method is based on the legal tax requirements defined in XML format and local VAT law.

Tax authorities around the world want to receive more frequent and faster tax relevant data for e-audit purposes to analyse Corporate Income Tax (CIT) and VAT positions taken to combat VAT fraud and to determine whether actually a fair share is paid (Base Erosion and Profit Shifting: 'OECD's BEPS').

Our SAP add-on already meets all the mandatory e-invoicing requirements. Our SAP add-on will include in the premium package 'E-way bill' functionality.

On 1 July 2018, the Spanish SII system changes. Several technical modifications become in force.

Filing SAF-T will be mandatory for large taxpayers: employ more than 250 people or 50 million EUR sales revenue irrespective of whether they are established in Poland or not. Per 1st July 2018 this extended to taxpayers with more than 9 employees or 2 million EUR sales revenue.

Portugal will launch B2G e-invoicing in phases. B2G will become mandatory in Portugal from January 1, 2021 and January 1, 2022.

In Portugal, in addition to the existing monthly SAF-T submission listing of all sales invoices for VAT purposes, businesses are required to provide annual accounting file in SAF-T format.

If the aim of your organization is full VAT automation of AP and AR, it is important to have a clear understanding of your material risks at hand, and your lowest performing processes in order to define the functional specifications for a solution.

The Egyptian Ministry of Finance has recently stated that its draft law about electronic invoicing will have positive economic effects. More VAT taxpayers will be registered, and VAT revenue will increase.

Some important updated concerning mandatory e-invoicing obligations in Italy such as soft landing and digital signatures and how invoices should be stored.

Tax authorities, due to technological innovations, have become increasingly better in executing their tax audit.

The adoption of the EU Directive 2014/55/EU of 16 April 2014 (the 'E-Invoicing Directive') made the use of electronic invoicing during public procurement mandatory.

To speed up the joint processing and analysis of data within Eurofisc, the Commission is currently developing TNA software for voluntary use by the Member States as of 2018.

Verify VAT configuration A SAP review should highlight where the VAT configuration could be improved or if additional control measures should be added to the business’s Tax Control Framework. 

On Friday, June 12, 2020, Greece Ministry of Finance, together with Independent Public Revenue Authority, published about the digital transmission on the platform of the Electronic Books myDATA.

The Commission adopts new proposals for the most far-reaching VAT reform in the EU for a quarter of a century VAT is a major and growing source of revenue in the EU, raising over €1 trillion in 2015, corresponding to 7% of EU GDP. 

For nearly every company, the accuracy and efficiency of local VAT compliance is completely dependent on the functionality of the underlying SAP system. Any incorrect set-up of the basic VAT configuration of their SAP systems can severely impact it’s processing. 

M&A Divestiture deals during planning and execution present lots of SAP challenges. Time and IT costs are critical drivers for such deals. By using our patented solution (M&A Divestiture Patent – US9330094B2 for SAP) and approach, organizations significantly reduce the cost and delivery time for successful data separations.

In Spain a new VAT reporting system will enter into force on the 1st of July 2017.

A high level overview is provided of the EU VAT system: what is subject to VAT and the right and methods of VAT recoverability. It includes also a comparison with the US Sales and Use Taxes system.

We have developed an SAP-integrated solution with the cockpit to select reportable outgoing invoices, create periodic Indian e-invoicing, E-submission of Indian JSON files, and control reports and the functionality. Although not yet a mandatory requirement, the solution is ready for FI invoicing.

SII (“Suministro Inmediato de Información”) in Spain is about changing the current VAT management system which has been in place for 30 years, introducing a new bookkeeping system for VAT on the AEAT online system, by providing all billing records virtually immediately.