KGT's SAP add-on for VAT data analysis is a tool embedded inside your existing SAP environment that automates VAT controls, independently verifies SAP's tax determination for every billing document, and covers both the SD and FI modules. It helps organisations detect errors before VAT is reported, reduce manual effort, and stay prepared for increasingly data-driven tax audits.
Key takeaways
- Runs inside SAP with real-time access to all VAT-relevant transactional data.
- Independently re-determines tax and compares it against SAP's result to surface discrepancies.
- Covers both SD (full-flow invoice chain) and FI (AP, AR and tax postings).
- Includes Continuous Controls Monitoring and a traffic-light check-result dashboard.
- Customisable with client-specific scripts and tested in peer SAP environments.
- Reduces audit risk and lowers current and future manual effort.
Why digital tax auditing raises the stakes for VAT
Advances in technology are reshaping how tax authorities operate. Increasingly sophisticated digital auditing lets them scrutinise indirect tax data with greater speed and precision than before, drawing on sources such as e-invoicing and SAF-T to collect and analyse VAT information directly.
As these methods mature, so does the likelihood that authorities will issue additional assessments and penalties wherever discrepancies appear. In this environment, a robust and proactive approach to tax risk management is no longer optional; it is a core requirement for any organisation that wants to stay compliant and in control.
How the SAP add-on works within your environment
KGT's SAP add-on is designed to operate seamlessly inside the SAP environment you already use. Rather than relying on exported extracts or parallel systems, it draws directly on the VAT-relevant transactional data of every legal entity running on the same SAP platform, where that data is securely stored. The result is real-time insight into your operations and a far more efficient route to meaningful analysis.
With complete and relevant data readily available, your organisation can build a precise understanding of its key risk factors and the impact each one carries, removing much of the uncertainty that usually surrounds indirect tax. The accompanying Continuous Controls Monitoring capability broadens this view beyond the indirect tax function alone, giving wider stakeholders visibility of, and a stake in, the controls that protect the business.
Used consistently, the add-on helps you maintain oversight and prepare for emerging VAT risks before they materialise. It frees internal teams and external advisers to focus where it matters most, keeping specific, identifiable risks manageable rather than letting them escalate unnoticed. Because the module is fully customisable, it can incorporate client-specific scripts, and it has been tested extensively in peer organisations' SAP environments before launch.
Beyond detection, the solution helps address the underlying causes of recurring issues by providing a structured way to manage open items through to resolution. As a tax consultancy, KGT can advise on these root causes and recommend remedies grounded in best practice, whether by implementing agreed SAP solutions directly or by supporting your IT department during implementation.
Why submitting data does not guarantee compliance
Submitting data to the tax authorities and accepting incoming e-invoices does not, in itself, guarantee compliance. The accuracy and completeness of reported VAT still depend on the quality of the underlying determinations. For this reason, specialists should review the data before submission, so errors are identified and corrected while there is still time to act on them.
What sets the solution apart
The add-on automates VAT controls, streamlines the compliance-check process, and supports client-specific audits. For each billing document it extracts the relevant tax data and accounts for the full range of factors that influence the outcome, including the countries of departure and destination, customer and material tax classifications, the applicable tax condition tables, and the final tax codes. On this basis it performs an independent tax determination in line with best practice, then compares the result against SAP's own determination so that any discrepancy is brought to light.
Full-flow checks in SD billing
A particularly valuable feature is the full flow check within SD billing, which provides a complete overview of the VAT codes applied across the entire invoice chain for a sales order linked to a local sales office. This is especially useful when analysing transactions involving multiple parties and when confirming compliance with local VAT rules for goods supplied from European warehouses. In an intercompany scenario, for example, partners Party A and Party B can follow the tax determination at every stage, from the intercompany outbound invoice raised by Party A, through the intercompany inbound entry recorded by Party B, to the final outbound customer invoice issued by Party B.
Validation across the FI module
The add-on is not limited to SD. It also extends into the FI side of the business, performing thorough validations of accounts payable and accounts receivable entries, together with the associated tax postings, before VAT returns and other obligations are finalised. These controls reduce errors, limit current and future manual effort, and strengthen audit readiness. Supporting all of this, the cockpit presents the information needed for a clear health assessment, including a check-result dashboard with traffic-light indicators that make the overall position easy to read at a glance.
Enhancing business performance through data analytics
KGT's data analysis solution helps SAP users improve both efficiency and compliance through automated tax controls. By enabling client-specific adaptations and extracting detailed tax information for every billing document, the add-on aligns your processes more closely with best practice and makes it possible to detect significant errors through systematic comparison with SAP's determinations.
KGT is ready to analyse your data and prepare a report that sets out the tax determination logic in use, the associated risks, and the key findings, along with the practical steps required to close any gaps. For organisations that find this analysis valuable on an ongoing basis, an annual subscription offers a straightforward way to make these assessments a regular part of the compliance routine.
Empowering your tax strategy
KGT's SAP add-on lets your organisation unlock the full potential of its tax processes. It supports better-informed decisions, helps optimize tax strategy, reinforces compliance, and contributes to stronger financial management. As tax authorities continue to refine their digital auditing, and as the consequences of indirect tax discrepancies grow, the case for disciplined and proactive tax risk management only becomes more compelling.
Frequently asked questions
What is the KGT SAP add-on for VAT data analysis?
It is a tool embedded directly in your existing SAP environment that automates VAT controls, extracts tax-relevant data for each billing document, and runs an independent best-practice tax determination. It then compares its result against SAP's own determination so that any discrepancy is flagged before VAT is reported.
Why is submitting data to tax authorities not enough for VAT compliance?
Submitting data and accepting incoming e-invoices does not guarantee that the reported VAT is accurate or complete, because the determinations behind it can still be wrong. Specialist review before submission catches errors while there is still time to correct them.
What is the "full flow" check in SD billing?
The full flow check gives a complete overview of the VAT codes applied across the entire invoice chain for a sales order linked to a local sales office. It is especially useful for multi-party and intercompany transactions and for confirming compliance on goods supplied from European warehouses.
Does the add-on cover finance (FI) as well as sales and distribution (SD)?
Yes. Alongside the SD module, it validates accounts payable and accounts receivable entries together with the associated tax postings before VAT returns and other obligations are finalised, reducing errors and improving audit readiness.
Can the SAP add-on be customised?
Yes. The module is fully customisable and can incorporate client-specific scripts tailored to your requirements. It has also been tested extensively in the SAP environments of peer organisations before launch.
What does KGT deliver as part of the data analysis?
KGT analyses your data and produces a report covering the tax determination logic in use, the associated risks, the key findings, and the practical steps needed to close any gaps. An annual subscription is available for organisations that want ongoing assessments.
Disclaimer: This article is for general information only and is not tax, legal or financial advice. Tax rules differ by jurisdiction and change frequently. Consult a qualified professional about your organisation’s specific circumstances.
