The SAP add-on intrastat module contains standard the following features:
- Realizes the link between the VAT business transactions and the Intrastat requirements. The SAP add-on contains a feature that reconciles VAT-relevant business transactions (i.e., EU transactions) with Instrastat data and vice versa. It highlights any mismatches for further investigation and possible remediation of the SAP setup.
- Performs a check on value mismatch between VAT reporting and Intrastat
- Performs a validation check for the commodity codes set up in your SAP environment with the catalog commodity codes officially published.
- Performs a check on exchange rate conversion mismatch
- Proposes the value based on the logic to be used. For example, country of origin regarding intra-company movements, etc.
- Supports manual changes of 'Intrastat relevant elements' such as commodity codes, country of origin, etc. These changes will have an audit trail in SAP.
Intrastat and SAP challenges
Intrastat reporting is one of the most complicated reports. Intrastat reports are primarily based on the Sales and Distribution and the Materials Management modules, as the movement of goods data is the starting point for the Intrastat reports. Intrastat is different from VAT reporting as the primary source of VAT reporting is the SAP Financial Accounting module.
The most significant hurdle in SAP Intrastat reporting is ensuring the completeness and correctness of the relevant Intrastat transactions. In standard SAP Intrastat, there are instances where transactions are selected incorrectly (correctness), or crucial transactions are overlooked (completeness). It's important to note that there is no direct link with the VAT treatment of the Intrastat transactions, adding to the complexity. Manual corrections are time-consuming and sometimes impossible.
The focus of the tax authorities
Intrastat reports are gaining traction as a valuable tool for tax authorities to assess the risk of VAT fraud, a matter of significant concern for the European Commission and local governments. This underscores the importance of accurate and timely Intrastat reporting. Tax authorities focus on mismatches between VAT returns and Intrastat reports, which can trigger an audit. In practice, reconciliation efforts afterward are time-consuming and often impossible due to the need for an audit trail.
When you are interested to learn more, please request a demo of the SAP add-on and its features that are set up in KGT's SAP environment.
