Global integration with SAP® ERP helps businesses transform their indirect tax determination and compliance — saving wasted time and potential penalties
Thomson Reuters today announced one of the biggest changes to affect the indirect tax landscape globally with the launch of ONESOURCE Indirect Tax Integration for use with the SAP® ERP application. Known as ‘Global Next’, this integration software was created to enable ONESOURCE Indirect Tax software to work together with SAP ERP to handle global indirect taxes.
In just one year alone, there were more than 350 tax rate and rule updates for VAT. For companies that operate in more than one country or region, keeping up with these changes requires critical tax, IT, or finance resources to support the indirect tax process. A significant amount of time and money is spent ensuring they comply with the law and calculate the correct tax amount, whether that be VAT, GST or business tax. Not only is this a hugely time-consuming issue for multinationals with operations in just a few countries, imagine those that have operations in more than 100 countries.
Severe financial penalties and interest are often a reality for multinational companies that fail to comply on time or use out-of-date tax codes and content to determine their rate of tax. Automation of this process through the use of tailor-made technology solutions has eased this problem for early technology adopters, but many businesses still rely on human intervention to determine, calculate, report and maintain the entire indirect tax process.
“With upcoming legislative changes, such as the new 2015 VAT place of supply rules in Europe and others, there’s no question that companies are increasingly turning to technology to help them reduce cost, complexity and risk around indirect tax,” said Stephen James, principal in charge of the Thomson Reuters Indirect Tax strategic alliance at the US audit, tax and advisory firm of KPMG LLP, a market leader in helping companies manage their indirect tax obligations and a user and licensor of ONESOURCE technology. “We’re firmly of the view that enabling technologies such as Global Next can be key to a rapid and successful ERP integration and indirect tax deployment, enabling companies to meet their implementation deadlines with reduced cost and enhanced compliance.”
Designed over a period of several years and conceptualised through the inherent need for greater transparency and accuracy, ONESOURCE Indirect Tax Integration for SAP ERP can help transform global transaction tax management by allowing multinational companies to maximise overall value with the use of both SAP ERP and the ONESOURCE Indirect Tax solution.
The introduction of this new integration software will modernise how indirect tax is determined, calculated and recorded by:
- Simplifying processes – Users can leverage standard VAT reports in SAP ERP to expedite the reconciliation process. Rates, rules and tax codes are updated in real time virtually eliminating the need to make subjective and error-prone tax code selections. The burden on IT departments is reduced for ongoing indirect tax support tasks such as coding and testing.
- Delivering flexibility – Integrating the Thomson Reuters tax determination engine and built-in global tax content with SAP ERP delivers support for simple-to-complex global transactions and enables businesses to make uninterrupted use of these financial applications.
- Maximising resource efficiency – Implementation teams utilise simple data field mapping with SAP ERP to significantly reduce tedious system-level programming, testing and set up work, which can save hours in wasted time.
“In the past, multinationals have had no other option but to use their ERP solution alone to achieve indirect tax compliance,” said Eric Ruud, managing director of ONESOURCE Indirect & Property Tax for the Tax & Accounting business of Thomson Reuters. “With ONESOURCE Indirect Tax Integration for SAP ERP, multinationals can now fully automate the indirect tax determination and compliance process. The result is an innovative, transparent approach to how global tax departments manage the indirect tax function in which tax penalties and interest may be reduced, accuracy can skyrocket, IT spends less time on tax policy configurations and countless pounds can be saved.”