Tax authorities have typically been relying on period-end declarations and cumbersome audits, leaving a chance for after the fact validations and corrections. Now the era of 'post fact' adjustments is vanishing: more and more tax authorities require all data in real-time, even before invoices are issued to customers, making compliance a must-have within your business processes in your cloud ERP.
Did you know:
- “By 2026, half of revenues will come from products, services, or businesses that haven’t yet been created” (1)
- “65% of consumer business leaders believe their corporate tax liability will increase as result of the Pillar One/Pillar Two project” (2)
- New “Spanish Plastic Tax” is expected to generate approximately €724m annually (3)
- 7 out of the 10 largest economies in the world either have introduced or plan to introduce mandatory electronic invoices for all business transactions (4)
To address your compliance needs, the GROW with SAP advanced compliance automation package, is a new commercial offering designed to help you transform, standardize and harmonize processes globally to comply locally, faster, and more efficiently. It also helps you respond to existing and upcoming e-invoicing regulations without compromising the efficiency of order to cash processes and ensure you have the adequate internal controls needed to safeguard your financial data, policies, and processes, as well as minimize the risk of noncompliance.
This first element of the package is the SAP Document and Reporting Compliance solution that helps you fulfill local compliance mandates - from electronic business documents to statutory reporting - and automate compliance processes.
The second element of the package is the SAP Risk and Assurance Management. It helps you centrally document and manage manual and automated internal controls over financial reporting, thus improving performance, protecting core data and processes.
Explosion of Local Compliance Obligations
You never go a full month without new tax news, as the digitalization journey of governments continues, resulting in more and more authorities pushing new e-invoicing regulations that are quickly becoming the new norm. And this is further going to increase with the “program announced by the European Union or tax initiatives in Japan, Saudi Arabia, Romania, Poland, Malaysia, Israel just to name a few.
This shift is motivated by various reasons, such as:
- Preventing tax evasion
- Increasing digitalization and controls in the public sector
- Or simply digitalizing the economy, for instance to reduce the carbon footprint
Whatever the deciding criterion behind it, the trend is clear: all tax authorities are investing in technology and introducing more demanding digital mandates:
Indicative examples of some external obligation… by no means exhaustive list!
Turning Taxes into Opportunities
With these challenges also come opportunities. The enables seamless compliance and helps companies respond to existing and upcoming regulations efficiently, in addition to improving and protecting business processes by minimize the risk of noncompliance.
It does so by providing a future-proof compliance platform with legal changes as a service, to standardize processes while complying with local legislations. Since no company is immune to anomalies, it provides the means to reduce operational delays, detect compliance issues, accelerate remediation in time for digital reporting and address issues at the source directly.
This helps achieve the following benefits:
Comply with ever-evolving Digital Mandates | Lower the cost of compliance with automation | Minimize risk of non-compliance |
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o One solution to fulfill all types of digital mandates from real time electronic documents to statutory reports o Continuously address increasingly complex mandates o Improve tax data quality and minimize the risk of noncompliance | o Remove manual workarounds and inefficient tasks o Gain efficiency with standardized operations across countries. o Simplify implementation of new mandates and ongoing support o Improve financial performance and accuracy | o Increase tax transparency and auditability o Detect compliance issues and accelerate remediation in time for digital reporting o Address issue at the source |
With SAP’s new GROW with SAP advanced compliance automation package, we aim to get you peace of mind, and help you improve your operational agility to implement legal mandates, as you navigate a highly competitive and price sensitive environment.
If you are interested in learning more about the solutions mentioned, look at the links below:
SAP Document and Reporting Compliance
SAP Risk and Assurance Management
Sources:
(1) The state of new business building, McKinsey, December 2021
(2) Deloitte, Global Tax and the impact of BEPS on consumer business, Deloitte’s 2020 global survey on the OECD’s Base Erosion and Profit Shifting (BEPS)
(3) Plastic taxes: a guide to new legislation in Europe, February 2023
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