Page 2 of 2: SAP and triangulation
Due to variations in country-specific rules, triangulation involves navigating different local regulations during VAT determination. This requires careful consideration of local rules when Party B is VAT-registered in either the "ship-from" country or the final "ship-to" country where the customer receives the goods.
If the supplier (i.e., the third-party vendor) is not properly configured in SAP, the "ship-from" location will not be accessible during the standard VAT determination process for billing and sales. As a result, the simplified triangular arrangement often necessitates manual intervention in standard SAP settings. Sales order staff and customer service representatives will need training to manually determine triangulations, and effective detective controls must be established to ensure accuracy in this process.
This manual intervention could be mitigated by enhancing standard SAP functionality to automatically recognize triangular scenarios and incorporate all relevant country-specific rules, thereby facilitating a fully automated VAT determination process.