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By Ferry Geertman, COO of the KEY Group
The KEY Group can be described as a “boutique” firm: a highly specialized and independent service provider. We focus on activities where ‘Business Control‘, ‘Information Technology‘ and ‘Indirect Tax’ come together.
A selection of our service offerings
Pre audit via statistical sampling
Statistical sampling has the added benefit of allowing the determination of the exact amount of any tax assessment by the tax authorities.
In our working method, we use the same method as the Dutch tax authorities. A “pre-audit” statistical sampling performed ‘internally’ offers insight into the tax risks that an enterprise encounters with respect to indirect taxes. Furthermore, for the tax department, this is an efficient and effective way to test the effectiveness of its Tax Control Framework.
The result could be used to get indirect taxes higher on the priority list, since managing of material risk that are quantified falls within the KPIs of a CFO.
VAT decisions are more and more shifting from employees who make entries in the system manually to ultimately the ERP system based on implementation of conditions tables/defaults. Data analysis can be a way of testing whether these VAT decisions are logical. Such analyses can include all the transactions in a selected period (year, quarter, month).
The results of the data analysis can provide insight into the existing compliance risks or opportunities with respect to the remittance of too much or too little VAT.
In a SAP review we verify the proper working of the implemented VAT configuration. Changes in the business model, master data or legislation will have an impact on the implemented VAT configuration.
The SAP review can demonstrate that the VAT configuration must be improved or that additional control measures should be added to the Tax Control Framework. The review can also bring errors and risks to light, allowing a more focused data analysis to take place.
After the quantification and evaluation of the risks and errors, these are assigned a risk profile in order to be able to test against risk tolerance.
The KEY Group has extensive expertise in the area of Business Controls / Internal Controls and has developed a normative framework for indirect taxes: a VAT Control Framework.
The actual situation (IST position) within the organization is then measured against this yardstick, generally resulting in a summary of the differences. Analysis of these gaps and the associated risks may lead to acceptance or to proposals for improvement.
It is an efficient and effective approach to test a company’s VAT Control Framework and to challenge the responsible process owners.
Product overview
Tax in Germany – mandatory electronic Tax balance sheet
There is a new legal requirement for the creation and submission of an electronic tax balance sheet (e-balance) in XBRL for all companies located in Germany. This poses a major challenge because many ERP software providers, such as SAP, do not offer a satisfactory solution for complying with the comprehensive legal requirements. Separate software applications for the submission of the report will be required.
We have launched “eBilanz-Cockpit”: an easy-to-use, user-friendly, cost efficient and fully integrated SAP solution for German electronic tax balance (references available).
Tax – All SAF -T submission directly via SAP self (test phase)
The new requirement relates to the monthly submission of the so-called SAF-T reports for Portugal, which is mandatory since 1-1-2013. It is possible to use standard SAP for creating the required report but it is a very complicated change in SAP (more than 100 OSS notes) that will consume a lot of IT resources.
We are currently developing an easy-to-use and lean SAF-T cockpit solution integrated in SAP with country specific flexibility. The KEY LiNKiT SAF-T solution is built in SAP and will be able to generate automatically based on the specific country’s legal requirements (e.g. every month and output) the mandatory SAF T files that need to be reported to the tax authorities.
Cash flow planning (test phase)
Cash flow planning – Integrated in SAP a cockpit for cash flow planning by which the current ‘as is’ can be compared with ‘as if/what if’ for optimum and effective planning and monitoring.
Access KEY Group’s thought leadership articles
Related articles
- Indirect Tax Function Effectiveness (indirecttaxfunctioneffectiveness.com)
- VAT Control Framework (indirecttaxtechnology.com)
- Case study: cross-border chain transactions and the weakness of Standard SAP (richardcornelisse.com)
- Indirect Tax Can Drive Costs For Shared Service Centers (indirecttaxtechnology.com)
- Merger and Acquisition – Integration And Indirect Tax: Managing the Moving Parts Before, During, And After a Transaction (indirecttaxtechnology.com)
- Everything You Always Wanted to Know About VAT in SAP * But Were Not Aware to Ask (indirecttaxtechnology.com)
- Taxmarc™: your best SAP solution for Indirect Tax Automation (indirecttaxtechnology.com)
- Governments Raise Consumption Taxes While Failing to Collect Billions (americanthinker.com)
- How Internal Audit could contribute value in realizing indirect tax objectives? (richardcornelisse.com)
Filed under: Audit Defense, Benchmark, Business Strategy, EU development, Indirect Tax Automation, Indirect Tax Strategic Plan, Processes and Controls, Technology, VAT planning Tagged: as if, as is, business control, Cash flow planning, CFO, cockpit, configuration, data analysis, e-balance, eBilanz-Cockpit, effective planning, effectiveness, electronic Tax balance sheet, Enterprise resource planning, ERP, errors, Ferry Geertman, gaps, Germany, improvement, Indirect tax, information technology, internal control, IST, IT resources, monitoring, OSS notes, pre-audit, process owner, remittance, report, review, risk tolerance, risks, SAF-T, sampling, SAP, SAP AG, software, statistical sampling, tax assessment, tax authorities, Tax Control Framework, TCF, thought leadership, Value-added tax, VAT, VAT configuration, VAT control framework, VAT decisions, what if, XBRL
