The VAT Rate Changes: A Checklist

  • by Kees van Westerop, Senior SAP Consultant, Kwest Consulting
  • January 8, 2013
Every now and then existing VAT rates are changed. Therefore, from a certain point in time a new percentage is to be applied for a VAT code. For example, in the Netherlands in October 2012 the high rate changed from 19 percent to 21 percent. Use this checklist of the most common activities you need to perform to help you make this rate change in SAP ERP Central Component.
Key Concept
The value-added tax (VAT) is a common tax system in the European Union (EU). The VAT is applicable for almost all sales and purchase transactions in the EU. It also has been in use for more than 40 years. Each time a country joined the EU, it had to adjust its tax system to the basic rules of the VAT used within the EU. Because of the current economic crisis in the EU, several countries are changing their VAT rates.

Within the European Union (EU) a value-added tax (VAT) has to be applied on almost all purchases and sales. In most countries, a low and a high rate of VAT is to be applied. Although historically the rates rarely change, in several countries the rates are being changed owing to the economic crisis. For many companies this is a new situation. They are used to setting up the VAT codes for new countries in which they roll out their SAP systems, but in this case, there is also an impact on the existing data.

I provide a checklist of the most common activities in the SAP ERP Central Component (SAP ECC) system to be done if the VAT rates change. It is impossible to provide a complete list of activities that are to be executed by every company because every SAP implementation is different.

Note
In the screenprints in this article, I use the rate change from 19 percent to 21 percent as my example, which just recently happened in the Netherlands.

Kees van Westerop

Kees van Westerop has been working as an SAP consultant for 20 years. He has an MBA degree in mathematics and a degree in finance. Kees has been concentrating on the financial modules, especially in general ledger accounting, cost center accounting, and consolidation. He also has a great deal of experience with rollouts of kernel systems and integrating finance and logistics.

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