Objectives To Consider

ERP systems

ERP systems such as SAP and Oracle either determine the VAT treatment (liability and VAT recovery) of businesses’ transactions automatically or this is a (semi) manual process.

Multinationals run often various versions of ERP systems or legacy systems without harmonization. The ERP set-up is often per business unit and thus multiple set ups per country are possible.

This could be the root cause that:

1. running of system's exception reports to look for missed opportunities, under claimed VAT and potential fraudulent transactions is still a challenging exercise
2. a lot of manual (re)work is often needed to file the VAT reporting and reconcile the VAT numbers due to the use of multiple spreadsheets and various data sources (divisions, different systems)
3. The latter is interesting as spreadsheets are usually found at critical points in the audit trail? and are designed by non-specialists with no system expertise?

An ERP system is not just an accounting system but also provides information about planning and production as well as being able to produce invoices and various reports.

Some objectives to consider:

1. Indirect Tax department utilizes leading edge tools and technologies in an integrated manner fully leveraging functionality offered
2. ERP and other systems are tax enabled and tax sensitized at the transaction level to support compliance, financial reporting and planning
3. There is dedicated IT support for indirect tax
4. Spreadsheets are replaced by technology tools and systems

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