Top Tax Considerations for SAP Customers

As a product or a service that is subject to VAT moves along the supply chain, transactions are documented, allowing the government to verify whether VAT was introduced at each step correctly through an audit.

While VAT is great in theory, it can leave massive holes in practice. Even though documentation might be out there, verifying the reliability of that documentation at every step in the supply chain based on aggregate periodic reports, paper-based records, and auditing companies’ diverse accounting systems is an almost impossible job for millions of supply chains around the world.

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Christiaan Van Der Valk
Vice President, Strategy

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The result? VAT gaps. The EU reported to be approximately 140 billion euros short last year alone. To bridge this gap and increase visibility and control, tax administrations are undergoing aggressive digital transformations.

As a result, four notable trends in VAT and technology have emerged that will have a significant impact on businesses. 

  1. Continuous Transaction Controls – increased controls are turning up the pressure for standardizing technology ecosystems.
  2. Destination Taxability – the taxability of digital services,digital goods and small packages
  3. Aggregator Liability – alleviating the operational burden on tax authorities
  4. Standard Audits – tax administrations want access to your accounting data

These four trends are tax considerations that all businesses, especially SAP customers, should be aware of and have a plan to address. 

In this article, we will cover these trends and provide expert tips on how your organization can be ready for any changes coming your way