Fiscal Solutions for Brazil – SAP Tax Declaration Framework powered by HANA, Developed in São Leopoldo
SAP has a long tradition in providing localized country versions for Brazil: starting with R/3 release 3.0, the very particular business processes involving Nota Fiscal and a very complex calculation of multiple indirect and withholding taxes have been part of the standard delivery of our ERP software. This was a big differentiator to other multinational ERP software providers and led to an unequalled market success of SAP in Brazil, which in 2013 turned the 3rd largest market after US and Germany.
However, while SAP provided the necessary core functionality to run the daily business processes, ever since there has been need for complementary software provided by SAP partners to handle the innumerous legal obligations: tax reports on federal, state and municipal level and a scores of other ancillary obligations. It is not uncommon for a midsize company with reasonable geographic presence to be subject to more than 1000 obligations per months.
So far, the eco-system has been able to fill this white-space, but over the past years the accelerated dynamic of Brazilian legislation (introduction of electronic Nota Fiscal NF-e, digital bookkeeping and fiscal reporting SPED) and the constantly growing amount of fiscal data makes it ever more challenging to manage all obligations adequately with the complex landscape of SAP and non-SAP bolt-on applications.
The SAP Tax Declaration Framework for Brazil (TDF) which was launched in December 2013 is intended exactly to alleviate this pain point by providing a modern platform on SAP’s high performance in-memory database HANA where companies can consolidate all fiscal and reporting relevant data from multiple SAP and non-SAP backend system in a central place, the so-called Central Tax Repository (CTR). This repository has been modeled in a way that it synchronizes in real-time with SAP ERP data (accounting documents, invoices etc.) and maps it via views into a format according to specification by the Brazilian government. It hence allows partners (and customers) to very easily build applications using the metadata with standardized semantic, i.e. without having to know SAP proprietary data type definitions.
The benefit for customers is manyfold:
– Consistent tax data in a central repository, synchronized in real-time with ERP backend systems;
– Tracking of corrections with possibility to apply them to the source ERP system;
– Standardized interfaces and database as part of SAP product, hence maintained and updated in the event of legal changes;
– Greatly reduced time to process period-end closing activities;
– Greatly reduced risk of fiscal non-compliance.
The development has been done in Co-Innovation with two key customers Gerdau and Petrobras and currently 9 partners engaged via SAP Co-Innovation Lab (COIL), also driven out of São Leopoldo. Also, a strong cooperation with the sales team and GS product management team in São Paulo were key to the success.
The business success is exceeding all expectations with 29 customers signing up already in 2014, enabling about 20 Mio revenues for SAP Brazil. Beyond that, it drives HANA into the Brazilian market, being very often THE reason to buy HANA. And further plans are about bringing this innovation from Brazil to other countries which makes TDF a perfect “reverse innovation” case.