Digital tax auditing
Due to technological innovations, tax authorities are becoming increasingly effective in conducting audits. The likelihood of these authorities issuing additional assessments and penalties for errors in indirect taxes continues to rise. They leverage data sources such as e-invoicing and SAF-T for VAT collection and analysis. As a result, taxpayers need robust tax risk management strategies.
The benefits of an SAP add-on
An SAP add-on for data analysis stands out for its seamless integration within your SAP environment. It provides instant access to all VAT-relevant transactional data from legal entities operating on the same SAP platform, securely stored within the system. This unique capability offers real-time insights into your company's operations, facilitating straightforward data analysis.
With detailed and relevant data at your fingertips, you can gain a clear understanding of key risk factors expressed in actual numbers, eliminating guesswork. This empowers you to take control of tax data analysis. The 'Continuous Controls Monitoring' tool allows stakeholders to extend their focus beyond indirect tax, making them feel valued and integral to the company’s operations.
With an SAP add-on, your company is better equipped to maintain control and act proactively, preparing for future VAT risks. The tool enables your internal resources and external advisors to concentrate on critical issues, ensuring that specific risks remain manageable.
The module is adaptable, allowing for the integration of client-specific scripts tailored to meet unique requirements. It has undergone thorough testing in peer organizations' SAP environments before its launch, playing a key role in identifying numerous areas for improvement.
The SAP add-on addresses underlying issues by delivering a comprehensive solution that effectively manages open tickets. As a tax consultancy firm, recommendations can be provided to tackle root causes and resolve problems using best practices, whether by implementing agreed-upon SAP solutions or supporting your IT department during the implementation process.
Why is it important?
It is important to remember that merely submitting data to tax authorities and having e-invoices accepted does not guarantee compliance. Regular checks by tax experts should be conducted before submission to ensure that reported VAT is accurate and complete.
Where does it differentiate?
The SAP add-on extracts data and automates tax controls, streamlining the control check process while allowing for the addition of client-specific controls. It gathers tax information for each billing document, considering various factors such as departure and destination countries, customer and material tax classifications, the applicable MWST condition table, and the final tax code. Tax determination is performed based on these criteria, following best practices, and comparing results with SAP’s determinations to highlight discrepancies.
A key feature is the “full flow” check in SD billing, which provides an overview of VAT codes applied throughout the invoice chain linked to a sales order from a local sales office. This is particularly useful for analyzing chain transactions among multiple parties and ensuring compliance with local VAT regulations when goods are supplied from European warehouses.
For instance, in ABC flows, intercompany partners Party A and Party B can observe tax determination results throughout the entire process: IC outbound (Party A), IC inbound (Party B), and outbound customer invoice (Party B).
Additionally, the cockpit should display all necessary data for health checks, complete with a ‘check result’ dashboard featuring traffic light indicators.
Data analytics can contribute to improving business performance:
- Cost reduction: by identifying potential cost savings and limiting expenses (for instance by tracing VAT that was erroneously not deducted)
- Risk analysis: tracing incorrect VAT determination or reporting incorrect returns
- Compliance: by identifying possibilities to improve the quality and efficiency of internal control
Analyze source data and provide trend analysis
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Quality and integrity of data |
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Profile analysis of the most important data fields to ascertain whether these comply with the applicable business regulations. |
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Identify the root cause of the problem regarding data quality and implement improvements. |
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Develop and implement improved data governance and quality assurance. Add new attributes to existing data so uniform and risk-oriented analysis becomes possible. |
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Combine information from different ERP sources and analyze this in conjunction. |
Transform Data into Information and Information into Insight
This approach allows organizations to anticipate future risks long before they materialize, enabling data-driven decision-making. By aligning your business strategy with advanced analytical capabilities, you can enhance your decision-making processes. Business changes can be simulated through "what-if" scenarios using real-time data, allowing you to quantify their potential impact with data-driven insights.
Beyond indirect tax, this capability can improve processes related to transfer pricing, logistics and warehouse management, cash flow planning, and more.
Enhance Your Performance for Smarter, Faster Decisions
A wide range of stakeholders can benefit from this functionality, as it provides real-time access to data, fostering more effective communication both internally and externally. This ability to "speak in numbers" can help garner support from other departments and facilitate the articulation of problem statements. Moreover, it supports business cases aimed at securing sponsorship for change initiatives and improves the management of executive KPI performance by utilizing actual figures.
