PROMOS simplifies implementation – how you can quickly map the current VAT reduction in SAP®

To alleviate the economic impact of the Covid-19 pandemic, the German Government has decided to reduce the rate of VAT for a limited time period, a measure which should be enacted in the coming days. It will probably come into effect on 1 July 2020 and will therefore have to be taken into consideration in many processes such as maintenance and rental accounting as of July 2020. We will quickly adapt your SAP® system.

What will change?

The amendment contains a reduction in the rate of VAT from 19 to 16 percent or, for the lower rate, from 7 to 5 percent. As this reduction is initially planned for the period from 1 July 2020 to 31 December 2020, the change in tax rates on 1 January 2021 must also be taken into account when system adjustments are made.

Where are adjustments made?

A prerequisite for all changes is that the new tax codes are defined and maintained in your SAP® system Customizing. All other modules can then build on this. Where necessary, the existing Customizing must be adjusted or enhanced, and individual analyses should be performed to determine required changes and points that users must consider.

For example, because of the limited time for which the tax reduction applies, the splitting of existing purchase orders that are posted to beyond 1 July 2020 in Materials Management must be taken into consideration. In the event of retroactive changes, such as a refund or credit memo, for example, it is necessary to ensure selection of the tax code corresponding to the original tax rate.

PROMOS will also make adjustments for invoicing in the easysquare craftsmen portal. These will be made individually based on the customer-specific configuration of the solution.

It is also necessary to consider how the creation of the utility statement for 2020 will be impacted, together with the later reversal of the VAT rate in the system.

Who should you contact?

The change in VAT is highly relevant for all companies. We are making every effort to help you implement the new requirements in your system. Contact us now to ensure a smooth transition. We are here to assist you with fast and effective solutions, even in times like this.

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