Norway introduces SAF-T to improve tax inspections

Norway is introducing SAF-T reporting for corporate entities, either resident or with physical presence in Norway (VAT registered businesses). From 1st January 2017 onwards it is required to provide SAFT-NO files in XML format on request of the Norwegian Tax authorities.

Tax authorities, due to technological innovations, have become increasingly better in executing their tax audit. The probability that the Tax Authorities will issue additional assessments and penalties in the near future because errors in indirect tax are detected, increases by the day. The SAF-T standard, originally created by the OECD, is intended to give tax authorities easy access to the relevant data in an easily readable format.

This leads to much more efficient and effective tax inspections.

Continue reading

Posted in SAF-T Norway, SAP for VAT | Leave a comment

A scalable SAP solution for countries implementing SAF-T

The SAP add-on is extendable to countries that uses the OECD framework as the basis for SAF-T reports. Note that countries might have their own specific local requirements but in case the basic required data are covered in the OECD framework it could be managed with country specific variants.

You can compare it with the EU VAT requirements: EU Directive as framework with some country specific rules based on the options in the EU Directive.

Continue reading

Posted in SAFT - Poland, SAP add on, SAP for VAT | Leave a comment

Integrated SAP add-0n solution for SAF-T

Besides recently Poland, SAF-T is introduced now also for Lithuania and Norway. A fully integrated solution in SAP without an external interface or use of external software is available for Lithuania, Poland and Norway. Other countries will follow.

This integrated SAP solution is developed together with a certified Global SAP Application Partner.

Continue reading

Posted in SAP enhancement point | Leave a comment

SAP add-on for SAF-T Poland

In Europe SAF-T is now in force in Austria, France, Lithuania, Luxembourg and Poland. Germany, UK, Ireland, Norway and the Czech Republic are most likely next to introduce SAF-T. Lithuania is expanding its SAF-T.

Starting October 1, 2016 all VAT-registered taxable persons, – including foreign companies registered for VAT – will be required to submit a SAF-T file in XML format to the LT Tax authorities on a monthly basis.


SAF-T SAP solution: fully integrated in SAP


We now offer a SAP add-on solution for SAF-T Poland (ABAP) at a fixed all inclusive fee. It is fully integrated in SAP without an external interface or use of external software. All inclusive means implementation, training and 1 year of free support and maintenance for bug-fixes & legal updates.

Our IT solution can be reused for other countries.


SAF-T Poland


Besides the monthly SAF-T VAT file in Poland, companies have to be able to meet the SAF-T obligation ‘on request’ containing different legal requirements. This submission applies in case of a preliminary tax inquiry, a tax audit and tax proceedings where the SAF-T file should be provided to the PL tax authorities in a short timeframe.  To avoid disputes and or penalties it is therefore important that a company is ready.


To establish synergies we have setup a joint venture initiative with a global development partner of SAP and leading software company in the area of e-invoice, e-bookkeeping, e-archive, e-ticket and such SAP add-ons in Poland. This company provides SAP certified add-ons for legal compliance to a large number of global well-known companies.

  • Runs over SAP
  • User friendly with single user interface (SAP)
  • Easy to install by external SAP transport
  • Easy to maintain by upgrades via transport files
  • Has its own global SAP namespace so there is no effect on SAP standards and is not affected by SAP upgrades
  • Standard SAP authorizations used
  • Open source code as ABAP programming language
  • Vendor independent
  • One year free maintenance service including bug-fixes & upgrades according to legal compliance

Last Thursday – 25 August 2016 – was the deadline of the monthly VAT SAF-T PL submission.

Our generated SAF-T VAT file reconciles with the numbers of the Polish VAT return and have also been checked with the official tool of the Ministry of Finance.


Contact us for more information

Posted in SAFT - Poland, SAP add on, SAP for VAT | Leave a comment

The Indian Parliament passes GST Constitution Amendment Bill

India

The Indian Parliament has voted unanimously to introduce the Goods and Services Tax (GST). This is a significant development which will affect all businesses with interests in India or who trade with India.

Continue reading

It is now time to take the necessary preparations as the go live date is ambitious. The article in the next hyperlink includes also a roadmap and points of attention in PowerPoint that might be useful: ‘Introducing a new VAT system‘.

Posted in SAP enhancement point | Leave a comment

Monthly SAF-T VAT PL – deadline 25 August 2016!

According to new regulation Large Enterprises are obliged to submit mandatory VAT SAF-T file in legal XML format for the first time on 25 August 2016. It is a monthly obligation.

SAP and VAT SAF-T

I refer for complete overview to ‘SAF-T for Poland and SAP‘.

Most companies download the standard SAP VAT return reports from SAP to Excel and have an Excel working paper for review and adjustments. The data in the SAP reports are retrieved from various SAP tables.The SAF-T VAT file need to reconcile with the submitted VAT return (monthly or quarterly).

If this file does not reconcile to the submitted VAT return the risk that the PL tax authorities will ask questions – explain the differences – is high.

Continue reading

Posted in SAP enhancement point | Leave a comment

Introducing a new VAT system

On 16 June 2016, the Finance Ministers of the Gulf Cooperation Council (GCC) held an extraordinary meeting in Jeddah, Saudi Arabia on GCC Value Added Tax (VAT). GCC States – Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates that make up GCC – will most likely introduce VAT on 1 Jan 2018 or by 1 Jan 2019 at the latest.

Source: Introducing a new VAT system

Posted in SAP enhancement point | Leave a comment

Certain SAP activities illustrated via ‘Brexit’

Unknown

The impact of ‘Brexit’ – its VAT law change – is used to illustrate the SAP activities and resources needed when a company has to deal with a country setting change from UK to Non-EU.


Assumed VAT law changes


‘Brexit’ will result that trade between the UK and the EU countries and vice versa will be treated as imports and exports. VAT reporting will change as well as EC Sales Lists and Intrastat reporting will no longer apply. Transfer of for example own stock to or from the UK is no longer considered a fictitious intracommunity transaction.

With respect to chain transactions UK companies or non-EU companies with a UK VAT registration can for example no longer be party B of a simplified triangulation, unless that UK company is also VAT registered in the EU. 


SAP – assess, redesign and … test!


In order to implement ‘Brexit’, SAP settings have to be changed. In SAP’s country table T005 the UK must me changed from EU to Non-EU. That also means that tax determination logic, tax codes, invoice and reporting requirements have to be assessed and any (new) rules implemented as well. Take for example ‘Plant abroad’ and transfer of own stock to or from the UK, it is no longer deemed a fictitious intracommunity transaction.

Companies that have GB hard coded in their tax determination logic to determine the VAT treatment of UK transactions need to review the logic setup to avoid non compliance.

Besides assessments by the tax function – extra costs when outsourced to external advisor – IT effort has to be scheduled in to make it happen. Change management processes follow strict IT policies and specific and extensive test rules in practice apply before it can go to production. Those mandatory test cycles are time consuming and have a huge impact on resources.

When manual processes and controls are setup to manage complex VAT transaction that includes dealing with the UK new guidance should be drafted and ongoing review take place to control that these new procedures are actually followed up.


The ideal SAP world of managing change


  • In the ideal world to implement Brexit and the current VAT rules from EU to Non-EU you would go to customizing of SAP and change the EU indicator field from ‘EU’ to ‘Non-EU’ and that the immediate outcome is that UK transactions are considered automatically import and export. Condition records do not have to be reviewed and ‘Plants Abroad’ settings are automatically updated.
  • Test cycles as mentioned above do not apply as the overall functionality has been tested before and has been IT approved as it works.
  • It would be ideal as well to have real-time access to UK transactions. That the blue print of the company can be shown so that you are able to immediately zoom in on (chain) transactions involving the UK. That such transactions can be made visible, accessed and changed on the spot. Not only important for UK companies but as well or even more for companies dealing with the UK.
  • Suppose SAP would have its own Tax Control Framework that automatically checks non VAT compliance. For example, the UK in a simplified triangulation is automatically picked up and blocked or put in an emergency table just because you have changed the country setting from EU to Non-EU.

Is that functionality already available?


Yes, all above functionality exist. It is called ‘PwC Taxmarc’
Contact


Data and technology

See also my first article about Brexit: ‘Brexit time to act‘?



Written by Richard H. Cornelisse


Posted in SAP enhancement point | Leave a comment

Monthly SAF-T VAT file in Poland (JPK-VAT)

Unknown

According to new regulation Large Enterprises are obliged to submit mandatory VAT SAF-T file in legal XML format for the first time on 25 August 2016. It is a monthly obligation even if the VAT reporting period itself is quarterly.

SAP and VAT SAF-T

I refer for complete overview to ‘SAF-T for Poland and SAP‘.

Most companies download the standard SAP VAT return reports from SAP to Excel and have an Excel working paper for review and adjustments. The data in the SAP reports are retrieved from various SAP tables.

The SAF-T VAT file need to reconcile with the submitted VAT return (monthly or quarterly). If this file does not reconcile to the submitted VAT return the risk that the PL tax authorities will ask questions – explain the differences – is high.

Our SAF-T VAT solution for Poland

  • First deadline to submit SAF-T file is August 25, 2016 (feasible)
  • Our solution ensures the completeness of the required data
  • Meets legal XML format
  • A control report exists that the total VAT amounts and data in the SAF-T VAT file reconcile

Read more

Posted in SAP enhancement point | Leave a comment

‘Brexit’: time to act?

Unknown

Relax, the VAT law will probably not change in the next 2 years.

The UK must first give the European Council notice of its intention to withdraw and a ‘Brexit’ agreement has to be negotiated. The negotiations are about setting the new relation between the UK and the EU and include tax and tariffs. That is already delayed as Prime Minister David Cameron considers that all a task of his successor.

“Mr Cameron has said it should be up to his successor to decide when to activate Article 50 by notifying the European Council. Once this happens, the UK is cut out of EU decision-making at the highest level and there will be no way back unless by unanimous consent from all other member states.

Quitting the EU is not an automatic process – it has to be negotiated with the remaining 27 members and ultimately approved by them by qualified majority. These negotiations are meant to be completed within two years although many believe it will take much longer. The European Parliament has a veto over any new agreement formalising the relationship between the UK and the EU.” Brexit: What happens now?

‘Brexit’ will result that trade between the UK and the EU countries will be treated again as imports and exports and most likely – unless negotiations will have a different outcome – result that customs duty have to be paid when goods move between the UK and the EU (duty rates might change).

As EU law will no longer apply – ‘be in force’ – the UK regains the right and flexibility to introduce own VAT legislation (again). That can be done much quicker as EU approval is also no longer required:

  • VAT rates and the scope of zero-rating and exemption.
  • Reversed CJEU decisions (e.g. broader scope of exemptions)
  • Place of supply rules that could result in double taxation or non taxation

The interpretation of UK VAT law during litigation becomes a UK matter only at least for issues that took place after the secession. With other words the UK regains full control.

VAT reporting will change as well as EC Sales Lists and Intrastat reporting will no longer apply unless a similar concept is negotiated with the EU. UK businesses that operate in the EU the VAT compliance obligations are impacted and an analysis should be made:

  • Appoint a fiscal representative
  • Invoicing and reporting requirements
  • Simplified trangulations for chain transactions
  • Distance sales rules
  • Mini One Stop Shop
  • EU VAT refund rules
  • etc.

From an operational perspective a company’s processes and controls have to be updated to the new situation at hand. ERP systems must reflect these changes and that means that tax determination logics, tax codes, invoice and reporting requirements have to be assessed and new rules implemented as well. IT time has to be scheduled in to make it happen.

That being said businesses will have sufficient time to oversee the consequences and be well prepared. It will probably take 2 years to come into force.

Lots can also happen in the meantime. Maybe a next referendum reverses the ‘Brexit’. Or United Kingdom will become less united as Scotland and the city of London (??? – LOL) decide to remain with the EU.

The future will tell.

Richard H. Cornelisse

Posted in SAP enhancement point | Leave a comment