Compliance Process Redesign

The Client

Our client is one of the world’s leading brewers. They are active in over 60 countries and have a revenue of over 20 billion USD.

 

The Situation

Our client is currently running a global program to bring all legal entities on to one single SAP instance. The European management companies were the first to go live in Europe. This took place in the same period as the changes in the European legislation with respect to the VAT treatment of services. These events, in combination with their initiative to implement a Tax Control Framework, called for a review and potential redesign of their VAT related processes.

 

The Challenge

Hand in hand with the roll out of the Global SAP instance, the business processes changed as well. This meant that part of the activities of our client and its shared service center in Europe were outsourced to a service provider in Asia. On top of this there were significant changes in the European VAT legislation with respect to services in 2010. All of which had a substantial impact on their business. The question arose on how their current VAT compliance process would meet their Tax Control Framework standards and if they were still capable of capturing all transactions correctly after all of the changes.

 

The Journey

The journey took us across various areas related to VAT; VAT compliance, VAT determination, the deductibility of VAT, VAT accounting, Training of staff and a Systems & Business process audit. All with the objective to implement a robust VAT design, that meets the standards laid down in the Tax Control Framework that our client was implementing in parallel.

 

The Solution

As the journey led us across the various continents of VAT, the Solution called for the same approach. The Solution we implemented can be divided into the following categories:

  1. VAT Awareness / knowledge
  2. VAT Compliance processes
  3. VAT Accounting and general Accounting processes
  4. VAT & Systems

The four categories are all closely interlinked and together contribute highly to the Tax Control Framework activities in relationship to VAT. Our extensive experience in Tax, IT and Supply Chain Management allowed us to identify quickly the root causes of any potential shortcomings. Our solutions are designed according to the current best practices in Industry.

 

The Implementation

Many departments were involved with the implementation of the solution as the desired changes impacted the various departments within our Client’s organization. We mainly worked together with the management of the companies, the VAT Compliance team, TAX, IT and Accounting. As it concerned management companies there was no Supply Chain involvement required. Considering that the Global SAP project ran simultaneously, smart choices had to be made on how to efficiently implement the required changes.

 

The Results

Our client achieved their desired goal, a VAT Compliant setup and A Tax Control Framework for VAT which meets their business standards. Our solution is business model independent, and therefore sustainable. In other words our solution is capable of capturing changes to the business model in the event of future changes.

 

More Information

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