Knowledge sharing

Wednesday, August 9, 2017

Tax Risk Management - submitting tax relevant data to the tax authorities

Tax authorities are besides optimizing traditional tax reporting systems increasingly implementing in addition electronic (almost) 'real-time' transaction reporting systems. It is expected that tax authorities due to technological innovations become increasingly better and faster in executing their tax audit.
Complementary to the existing and more traditional tax reporting in countries like Austria, France, Lithuania, Luxembourg, Norway, Poland, Portugal, Spain already (close) to real time data request have to be submitted and/or should be available on short notice when a tax audit is announced. 

In countries like Austria, France, Lithuania, Luxembourg, Norway, Poland, Portugal, Spain already (close) to real time data request have to be submitted and/or should be available on short notice when a tax audit is announced. 

What is next?

Italy, the VAT invoices data informative reports must be filed with the tax authorities on a six-monthly basis starting by September 18, 2017. From 2018 the deadlines will be on a quarterly basis. For Hungary realtime invoicing is postponed to 1 July 2018. Companies need to have a solution implemented that is capable of real time data transfer by 1st of July 2018 at the latest.


It is however not clear how the tax authorities actually will analyse the data received. That might change soon as their strategy is an improved and faster tax audit including combatting VAT fraud as an overall EU priority.


Let me explain

Monday, July 31, 2017

VAT Control Framework: how to get from A to B

The critical conditions for success
The importance of indirect tax has increased over the last couple of years. While the rates for direct tax, corporate income tax, are decreasing, the rates for indirect tax keep rising. At multinational companies we’re easily talking about amounts of over 5 billion euros of indirect tax flowing through the books.
According to big4 surveys, the related control mechanisms are still inadequate. Not only can an error in the accounts lead to major additional tax assessments and substantial penalties, with amounts like these, it can be devastating for the reputation of a listed company. We are talking about extremely large amounts of money that lack appropriate control, but because KPIs have never been developed for this particular purpose, the risks remain outside the CFO’s field of view.
The Indirect Tax Function is aware of the fact that it is understaffed and that budget is too limited to optimally execute its tasks, but they often don’t know how to change this and get it on the agenda of the CFO.
It’s essential that change comes from the organization itself. An advisor can repeat this over and over, but if it isn’t carried out within the organization, by the people who actually have to work with it, nothing will change. And that deadlock must be broken.
What should be done to actually break it? 

Tuesday, July 25, 2017

Being ready for GCC VAT introduction when operating SAP

The Governments of the Gulf Cooperation Council (GCC) - Bahrain, Kuwait, Oman, Qatar (status unknown due to GCC politics/friction), Saudi Arabia and the United Arab Emirates that make up GCC - are committed to form a common framework for the introduction of value added tax (VAT) in the region. In order to achieve conformity within the GCC, it is anticipated that the six member states will all aim for implementation of VAT during the period commencing 1 January 2018 or by the end of 2018.

VAT as a process will affect many aspects of businesses operating in the GCC and will require significant time to plan, and integrate into existing processes.

Setting the objectives
  • To be ready in time and a need of an effective and efficient work process between Tax function, IT function and its third party consultants
  • To optimize its VAT deduction and to automate this VAT process as much as possible in SAP
  • To limit VAT risks and meet VAT reporting obligations (e.g. reverse charge mechanism to avoid non VAT compliance)
  • To automate VAT processes via enhancing the SAP 'as is' functionality where possible
  • Set up processes and controls when VAT automation is not feasible
  • To test new SAP functionality prior to go-live (sandbox)
Based on above objectives the PDF document 'More detailed description of Work in booklet' established the scope, schedule and means of initiating the work to be performed by the service provider and describes or references the specifications, instructions, standards, and other documents, which the service provider shall satisfy or adhere to in the performance of the work
The KEY Group is supporting one of the largest multinationals with the setup of the GCC VAT rules in SAP itself
Read more: Being ready for GCC VAT introduction when operating SAP


Saturday, July 8, 2017

SII VAT filing submission: we successfully met first submission deadline

Istanbul, Turkey and Amsterdam, the Netherlands — SNI and Key Group announce for 50 multinationals a successful Spanish SII filing

The Spanish SII filing, a new requirement introduced by the Spanish government, requires taxpayers to submit VAT relevant transactional data of their Accounts Payable (AP) and Accounts Receivable (AR) records in a specific XML format close to real-time to the Spanish tax authorities (AEAT). To support these new regulations our clients have implemented our SAP add-on for Spain. 

That is a SAP integrated solution for Spain with a cockpit to select reportable outgoing and incoming invoices, create periodic SII files (envelopes), E-submission of SII XML files and control reports. The creation and submission of the SII reports could be fully automated in SAP Batch jobs. It is however also possible to do some SII reports (for example the sales invoices) fully automated and other SII reports (for example the incoming invoices) manually.


All flags are on green

We are pleased to announce that our first actual SII VAT filing submission were completed successfully prior to first submission deadline.