KGT possesses practical experience and a deep understanding of SAP's VAT capabilities and limitations, equipping us with the expertise to optimize resources, minimize manual tasks, and effectively manage risks. We specialize in implementing VAT regulations within SAP and are well-prepared to enhance standard SAP functionalities for both outgoing and incoming invoice VAT determination, as well as to optimize VAT reporting.
We can effectively communicate requirements to external SAP consultants in their technical language and demonstrate pathways to achieve desired outcomes within SAP.
For nearly every organization, the accuracy and efficiency of VAT compliance in local jurisdictions are heavily reliant on the capabilities of the underlying ERP system. Operational deficiencies in a system designed for VAT compliance can lead to significant financial risks.
Numerous instances exist of mismatches in VAT treatment for purchases and sales in chain transactions, double VAT payments, and overlooked manual adjustments in VAT filings - all consequences resulting from limitations in SAP’s automated VAT solutions.
Companies must ensure that the VAT determination logic within their SAP systems is accurate, easily implementable, and capable of maintaining VAT compliance as regulations evolve. In practice, specific functionalities intended to support VAT objectives are often left unused, either due to budget constraints or a lack of SAP VAT expertise during the design phase.
Typical client objectives include:
- Timely readiness and the establishment of effective and efficient workflows between tax, IT, and third-party consultants.
- Optimization of VAT deductions and the automation of VAT processes within SAP to the greatest extent possible.
- Limiting VAT risks and fulfilling VAT reporting obligations (e.g., adhering to the reverse charge mechanism to prevent non-compliance).
- Enhancing SAP's existing functionality to automate VAT processes wherever feasible.
- Establishing processes and controls when VAT automation is not achievable.
- Testing new SAP functionalities prior to go-live in a sandbox environment.
The VAT system implementation comprises two distinct phases: Solution Design (Phase 1) and System Implementation (Phase 2). The scope of work outlines the specific requirements for both phases.
- Phase 1: Develop a Business Blueprint that details the implementation of VAT in SAP and supporting systems. This blueprint will be created by understanding and incorporating VAT compliance requirements, the client's VAT strategy, detailed business needs, and the current system landscape.
- Phase 2: Execute the implementation of the blueprint in collaboration with the client’s IT team. This phase includes testing, training, documentation, and go-live support, as well as the development of reporting mechanisms to ensure compliance with VAT requirements between the client’s SAP system and government authorities.
SAP VAT Implementation ensures that VAT determination and reporting processes are correctly set up and optimized within your SAP system, helping your organization stay compliant and efficient.
Accurate VAT logic within SAP reduces financial risks, prevents compliance errors (such as double VAT payments or missed adjustments), and supports efficient tax reporting in local jurisdictions.
We address system limitations, unused VAT functionalities, and communication gaps between tax teams, IT, and external consultants - ensuring smooth implementation and reduced manual effort.
We combine tax expertise with deep SAP knowledge, bridging the gap by translating tax requirements into SAP’s technical language while aligning with your business objectives.
Clients aim to optimize VAT deductions, automate VAT processes, limit compliance risks, and establish clear workflows and controls across tax and IT teams.
Phase 1 – Solution Design: Develop a detailed Business Blueprint that incorporates compliance requirements, VAT strategy, and system landscape.
Phase 2 – System Implementation: Execute the blueprint with testing, training, documentation, and go-live support.
We provide end-to-end support, including sandbox testing, training of key users, documentation, and reporting setup to ensure VAT compliance from day one.
Yes. The solution design is fully customized to your organization’s VAT requirements, business processes, and SAP environment.
Common risks include incorrect VAT treatment in chain transactions, double VAT payments, overlooked manual adjustments, and non-compliance with reverse charge rules.
Typically, Tax, IT, and external SAP consultants collaborate - KGT ensures effective communication and alignment between these stakeholders.