Knowledge sharing

Friday, May 27, 2016

SAF-T for Poland and SAP

From 1st July 2016 onwards it is required to provide SAFT-PL files in XML format on request of the PL Tax authorities.
Per 1st July 2018 this extended to taxpayers with more than 9 employees or 2 million EUR sales revenue. Foreign businesses not having a branch and/or fixed establishment but that are registered for VAT in Poland fall within the scope of the above reporting requirement when above conditions are met.

On 19 May 2016 the Upper Chamber of the Polish Parliament passed a bill on the amendment of provisions of the Tax Ordinance and of some other acts. According to the bill adopted by the Parliament, the obligation to generate VAT reports in a SAF-T data format and their monthly reporting to the tax authorities will apply initially only to the largest enterprises for each month begun on or after 1 July 2016.

According to new regulation It means that Large Enterprises will be obliged to file VAT reports in the SAF-T data format already on 25 August 2016. Thus, Large Enterprises will be obliged to submit in monthly period VAT register in SAF-T format (according to JPK_VAT structure 4 – VAT register) even if the VAT reporting period is quarterly.

Taxpayers will be obliged to submit the SAF-T format:
  • on request in the case of a preliminary tax inquiry, a tax audit and tax proceedings;
  • monthly mandatory – with respect to the VAT sales and purchases records only (Article 109(3) of the Value Added Tax Act of 11 March 2004 (VAT records) by submit monthly a SAF-T file that contains VAT sales and purchase records

The first requests to submit audit files at their discretion will likely take place September 2016.  The monthly VAT reports on 25 August 2016.

Not complying with this obligation will not only negatively affect the position of taxpayers during a tax audit but also result in unforeseen tax costs as penalties will be levied.


SAFT Poland and SAP


The generation of the SAFT-PL XML files is not included in the SAP Strategy at the moment. SAP is currently only developing an extraction tool for SAP ECC 6 and higher version. Certain companies use “older versions” of SAP and will not be supported by SAP.

Based on SAP's OSS notes, SAP provides only at the moment a functionality for gathering and downloading some transactional data. However, it is not the complete set of data required and the creation of the SAF-T file for the tax authorities is also not included.

The functionality will also only be available for companies established in Poland and not for companies with a foreign Polish VAT registration. In order to be able to comply with the requirements and provide the XML file on request in time, tooling needs either to be developed or purchased.


Our solution


A SAFT-PL tool that already works for Portugal that includes also strategy for downloading the relevant data from SAP  for older SAP versions.

The basic design for a workaround solution is to extract the raw source data from the relevant SAP tables and use software tools to load the relevant data from the source SAP tables, perform additional mappings and data preparations and create the required XML files.

We offer 2 solutions:

  • A software application called Audit Command Language (ACL). This software is commonly used by auditing firms, tax authorities and internal audit departments. The process will be that the client will download the data from SAP and make it available to the Phenix. Phenix will then generate the XML files and some control reports and provide these files and reports available to client for submission.
  • A tool in MS Access  in combination with a specific user interface for extracting the data from SAP. The result is a full in-house solution for the client.

Detailed information about SAF-T compliance and planning


Sunday, May 22, 2016

Embrace technologies and catch up: Taxmarc


Access to the right data at all times 
  • On the basis of this guarantee Taxmarc makes your data management extremely straightforward. The tax control framework checks every transaction, after which the database only saves the correct figures. Non-compliant transactions are reported in real time so that the tax department can take action immediately. It is no longer necessary to carry out a manual check of the data when making a tax return.
Integration with SAP, simple maintenance 
  • Taxmarc is a permitted add-on for SAP – the code is written where SAP allows this. The integration with SAP means that no extra interface is necessary. As a result, SAP upgrades do not lead to any problems and maintenance is straightforward. There is no need to program anything yourself. The Taxmarc implementation guide (IMG) makes it possible to adjust the configuration in line with your personal wishes.
Automatic reporting 
  • Thanks to Taxmarc’s central data management you can generate reports automatically. Examples are an automatic VAT and Intrastat return and any section of your data that you desire, without any manual effort being required. Integrated tax control framework The tax control framework in Taxmarc checks every transaction to make sure that it is permitted according to the legislation and regulations and permissible in accordance with the organisation’s own rules. Rejected transactions are reported immediately and automatically so that the tax manager can take action at an early stage and always has access to the accurate tax position.
Central data storage 
  • Taxmarc uses thirty parameters to collect all the tax data from SAP and places it in a single database. The real-time check by the integrated tax control framework guarantees high data quality. Contamination of the database by rejected transactions is a thing of the past. The central data management facilitates data analysis up to transaction level. Integration with other systems, for example with the Tax and Customs Administration, is straightforward.
All relevant data on a single screen 
  • The easy-to-use Taxmarc cockpit offers buttons to make any data report you desire, for example the total VAT position, transactions rejected by the tax control framework or country reports. Taxmarc is designed to be easy to use for tax managers and displays all the relevant data - such as tax code, VAT registrations, proof of export and import indicator - on a single screen. Thanks to the central data management, users can freely click through to goods flow details from financial and VAT data.
Global solution Taxmarc is currently operational in around 50 countries. 
  • This means that Taxmarc can determine ‘indirect tax’ for all the regions in which you are active – no matter whether this means VAT, GST, sales tax or use tax.
Do you like to know more about SAP VAT weaknesses and technology improvements:



Wednesday, May 18, 2016

Tax Assurance Research: Indirect Tax and Transfer Pricing




Chapters of Tax Assurance Research

  1. Executive summary
  2. Planning of non-routine transactions
  3. Tax strategic plan
  4. Tax risk management
  5. Tax Control Framework
  6. Data and Technology
  7. Reporting
  8. Tax Transparency
  9. Enhanced relationship
  10. Training
  11. VAT fraud
  12. EU developments

Tax strategic plan – Table of Contents




Data and Technology - Table of Contents




Tax Transparency - Table of Contents



Tuesday, May 17, 2016

Stewardship: what will your legacy be?



Andersen's stewardship comes to mind

"the idea being that when you became a partner at Andersen you agreed to make it stronger before you left than what you had inherited."

Is that still measured nowadays at BigOrganizations as it is about the added value you contribute in developing others that impacts a company's continuity and market leaderships objectives after you're gone?

More in this article:  Pitfalls Of Actual To Budget Exercises.  For complete overview read as well all the article's hyperlinks.

IoT: is ‘Google’ the adviser of the future?


To translate to tax, this is what I wrote in 2012:

Is Google the Adviser of the Future?

Non-traditional competitors are entering the service provider market and capturing market share:

  • Who are they? 
  • Can content service providers ignore these trends?
  • Will technological innovation get an extra boost from this economic climate?
  • What can we expect next?
  • Is ‘Google’ the adviser of the future?


Monday, May 16, 2016

OECD - Tax Administrations and Capacity Building

Effective tax systems are a critical building block for increased domestic resources in developing countries, essential for sustainable development and for promoting self-reliance, good governance, growth and stability.

OECD - Co-operative Tax Compliance Building Better Tax Control Frameworks


On May 13, 2016 the OECD published the report. It outlines the essential features of a Tax Control Framework (TCF) and addresses revenue bodies’ expectations of TCFs.

It includes a discussion of the issue of materiality, as it is important to understand the relationship between what is material for the purposes of systems of control, such as the external audit of a multinational enterprise’s accounts, and what is material in terms of the tax liabilities arising from that enterprise’s activities in a particular country.

It also discusses how revenue bodies could approach the task of testing the soundness of a TCF in any particular case and finally, sets out conclusions, recommendations and next steps.


Saturday, May 14, 2016

Analyze the past, predict the future and redefine yourself



There’s a building in the Cayman Islands that houses supposedly 12,000 U.S.-based corporations. That’s either the biggest building in the world or the biggest tax scam in the world, and we know which one it is - Barack Obama

Apple’s, Google's and Coca Cola’s tax assessments are material from an annual report perspective besides financial risks contain reputational risks.

  • Italian tax police believe Google evaded 227 million euros in taxes.
  • Apple has agreed to pay €318m (£235m, $348m) to Italian tax authorities following a two-year fraud investigation, according to reports.
  • Google agreed to pay the UK treasurer £130 million ($185 million) in back taxes, covering the period since 2005, and to also pay higher taxes in the future.
  • France is seeking 1.6 billion euros ($1.76 billion) in back taxes from U.S. Internet giant Google.

Let's discuss the past, impact and what to do ...

Friday, May 13, 2016

Awareness and acceptance by senior management




Demonstrate reasons for change in a language that Finance understands

The deck in the first link shows a conceptual roadmap that could be used as guideline. As organization structures or maturity levels are not the same, the startpoint could for every company be different. Important from a business and finance perspective is that the financial reports are read and studied and when available investors calls that you listen in and analyze to get a grip of the company compliance statements, business objectives & strategy and short and long term forecasting, etc. Those are the sales arguments for change you need.

Based on that define the areas where indirect tax (or TP) has the biggest impact and lowest performing process or technology.


Thursday, May 5, 2016

Tax revenue in 2015 (EU and NL)

More than 160 countries have a VAT regime. In the EU, between 2008 and 2013, the average EU standard rate increased from around 19.5% to more than 21%. The EU average VAT rate is now approximately 21.5%. VAT accounts for more than 20% of total tax revenue (source: OECD).

Netherlands: Tax revenue in 2015
Indirect tax revenue in NL was in 2015 EUR 74,9bn compared to Corporate Income Tax EUR 21,3bn. Wage tax and income tax was EUR 133,7bn.

Taxation in the EU The infographic below shows the income from direct and indirect taxes for each member state as well as total tax revenue as a percentage of the gross domestic product. The latter is divided between taxes on capital, consumption and labour. In addition this map shows how wealthy countries are.  



Read more detail

Benchmark info, templates and approaches for process improvements and meeting objectives



Our aim is to share our expertise with you through this website, to create and share current state benchmarking knowledge, to inspire and also challenge your department functions through offering modules that can be used to scope process gaps from an Indirect Tax and Transfer Pricing perspective.

You can enter either via: 'Where you are and where you want to go'. A 'Table of Contents' pops up, click on 'to read' and select the chapter you like to visit by clicking again.

The chapter 'Roadmap to Indirect Tax function Effectiveness' is a executive summary and contains a section how to get internal buy-in and write a problem statement and business case. 'Structure the Tax function' is my view and personal story.

'Data and technology' is an interesting read as the weaknesses of SAP VAT are explained in detail. 'Tax Transparency' gives you an overview of tax trends and correlation with TP. Of course the chapters 'VAT Control Framework', 'Indirect tax Risk Management' and an 'Indirect tax Strategic Plan' are discussed.

And a lot more ...