Spreadsheets and VAT compliance

With human error added into the equation, some defects are going to occur. If the tax function only has MS Excel to perform data transformation to make the data tax ready, the volume of procedures and controls will have to be significantly greater.

The problem is that in Excel altered data can lose its audit trail back to its source: mismatches with a companies ERP system. A point of attention as ERP data is the source of truth by the tax authorities (e.g. e-audits such as SAF-T).

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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.

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SAF-T SAP solution: fully integrated in SAP

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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.

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SAF-T Poland

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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.

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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.

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The Indian Parliament passes GST Constitution Amendment Bill

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'.

Publishing your tax strategy

Certain businesses have to publish their tax strategy and be able to demonstrate how the tax strategy is being applied in practice. The strategy should set out the business’ attitude to tax risk, its appetite for tax planning and its approach to its relationship with HMRC. Although it applies to the UK, being consistent across jurisdictions is important as these obligations might be a global tax trend.

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Sale-and-lease back not rental but other service subject to VAT

The Supreme Tax Court considers a sale-and-lease-back transaction as a taxable other service rather than a lease or the tax-exempt grant of a loan if the chosen scenario is a reasonable non-tax driven choice of form used to enable the seller (lessee) to enjoy certain accounting and reporting benefits.

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VAT exemption for Intra-Community supplies: Transport document can be replaced by destination document

In order to apply the VAT exemption for intra-Community supplies in Belgium (article 39bis of the Belgian VAT Code), Belgian VAT authorities require the supplier (amongst others) to obtain and keep a set of commercial documents that the goods have been transported from Belgium to another Member State. Suitable evidence includes contracts, purchase orders, transport documents and payment documents.

In order to enhance legal certainty, the Belgian VAT authorities recently published a new Administrative Decision (E.T. 129.460) which confirms that the transport document can be replaced by a so-called destination document.

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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.

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Transfer pricing and IT needs

From a tax controversy perspective TP documentation is important and often results in conflicting priorities within the tax function (allocation of budget and tax resources).

Better resource allocation and process improvement can be achieved via (semi)automated documentations, configure ERP systems to support TP needs or implement add-on or bolt-on tools. For example, in the area of data extraction and workflow management, entity charting, document storage, real time reporting, scenario planning and data interrogation.

Read more: Transfer pricing and IT needs