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.
Advantages of an SAP Add-On for VAT Data Analysis
The SAP add-on for data analysis is distinguished by its seamless integration into your existing SAP environment. It provides immediate access to all VAT-relevant transactional data for legal entities operating on the same SAP platform, securely stored within the system. This capability provides real-time insights into your organization’s operations, streamlining data analysis.
With comprehensive, relevant data at your disposal, you can gain a precise understanding of key risk factors and their impact, thereby eliminating uncertainty. This equips you to take command of tax data analysis. The "Continuous Controls Monitoring" tool extends stakeholder focus beyond indirect tax, making them feel valued and integral to the organization’s operations.
Utilizing this SAP add-on enables your organization to maintain oversight and adopt a proactive approach in preparing for future VAT risks. It empowers both internal resources and external advisors to concentrate on critical issues, ensuring that specific risks remain manageable.
The module is customizable, allowing for the integration of client-specific scripts designed to meet unique requirements. It has undergone extensive testing in peer organizations' SAP environments before launch, identifying numerous areas for improvement.
The SAP add-on effectively addresses underlying issues by providing a comprehensive solution for managing open tickets. As a tax consultancy firm, we can offer recommendations to address root causes and resolve challenges using best practices, whether by implementing agreed-upon SAP solutions or assisting your IT department during the implementation phase.
Why Is This Important
It is crucial to recognize that submitting data to tax authorities and accepting e-invoices does not guarantee compliance. Regular audits by tax experts should be conducted before submission to ensure the accuracy and completeness of the reported VAT.
Unique Differentiators
This SAP add-on automates VAT controls, streamlines the compliance-check process, and enables client-specific audits. It extracts tax data for each billing document, considering various factors such as departure and destination countries, customer and material tax classifications, applicable tax condition tables, and final tax codes. The tax determination is conducted based on these criteria, in accordance with best practices, and the results are compared with SAP’s determinations to identify any discrepancies.
A notable feature is the "full flow" check in SD billing, which provides a comprehensive overview of VAT codes applied throughout the invoice chain for a sales order linked to a local sales office. This is particularly beneficial for analyzing transactions among multiple parties and ensuring compliance with local VAT regulations for goods supplied from European warehouses. For instance, intercompany partners Party A and Party B can observe tax determination results throughout the entire process, including IC outbound (Party A), IC inbound (Party B), and outbound customer invoices (Party B).
In addition to the SD module, the tool incorporates features pertaining to the FI aspect. It conducts thorough validations of accounts payable and accounts receivable entries, as well as tax postings, before the finalization of VAT reports and other tax-related obligations. These controls are instrumental in minimizing errors, reducing both current and future manual efforts, and enhancing audit preparedness.
Furthermore, the cockpit displays all necessary data for health assessments, including a "check result" dashboard with traffic-light indicators.
Enhancing Business Performance Through Data Analytics
KGT's advanced data analysis solution for SAP users enhances efficiency and compliance through automated tax controls. Our add-on enables client-specific adaptations and extracts detailed tax information for each billing document, considering factors such as departure and destination countries, customer and material tax classifications, and applicable tax codes. This enhances alignment with best practices and facilitates the detection of significant errors through comparative analysis with SAP’s determinations.
KGT is prepared to analyze your data and compile a report detailing the tax determination logic, associated risks, and key findings. This documentation will also outline essential steps to address existing gaps. If you find our data analysis invaluable for regular assessments, consider licensing an annual subscription to our solution.
Empower Your Tax Strategies with KGT's SAP Add-On
Unlock the full potential of your tax processes with our SAP add-on tailored for VAT data analysis. This tool empowers your business to optimize tax strategies, ensure compliance, and enhance overall financial management. Do not miss the opportunity to enhance your data analysis capabilities and drive informed decision-making.
As technology advances, tax authorities are becoming increasingly effective at conducting audits, increasing the likelihood of additional assessments and penalties for discrepancies in indirect taxes. Consequently, effective tax risk management strategies are imperative. KGT's SAP add-on for data analysis is poised to provide your organization with the insights and tools necessary to navigate these challenges successfully.
