Local solutions. Global success. SAP Supports KSA 2030 Visiononline.spellboundme.com/sap/nowksa2018-original/assets/2---musilhy... · SAP eDocuments, SAP NFE Comply with many local

SAP Supports KSA 2030 Vision Rolling out new Tax regimes

Local solutions. Global success.

Khaled Musilhy Director Globalization Services, SAP

April 30, 2018

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The information in this presentation is confidential and proprietary to SAP and may not be disclosed without the

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presentation and SAP's strategy and possible future developments, products and or platforms directions and

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All forward-looking statements are subject to various risks and uncertainties that could cause actual results to

differ materially from expectations. Readers are cautioned not to place undue reliance on these forward-looking

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decisions.


3Internal

Agenda

Global changes in Tax domain

SAP Holistic Tax solution “end-to-end” supports KSA 2030 vision

Key messages

How? … SAP Globalization Services is the answer


Tax is important topic, but has not been in focus in past

3rdlargest item of the working

capital is Indirect Tax

1in 8 business have global head

of VAT/GST having visibility

over returns prepared locally

over 160countries (except the US) will have

centrally administered indirect tax

systems. As competition for foreign

investment intensifies, many countries

are reducing their headline corporate tax

rates. To replace revenues from taxes

on profits, most countries are shifting

their reliance to taxes on consumption.


Digitization of Tax Obligations Around the GlobeManual processes in disjoint systems are not possible anymore

Time

Risk:

Loss of Millions

Risk:

Reputation -

Personal and

Organizational

Risk:

Work Overload

Past:

Manual integration

possible

Risk:

Competitive

Disadvantage

Worldwide

tax changes


Levels of Digital Compliance (according to E&Y)


Current State of Digitalization across the Globe (acc. to E&Y)


➢ A value-added tax (VAT) is a type of consumption tax that is placed on a product whenever value is added at a stage of production and at final sale.

➢ It differs from the sales tax in that taxes are applied to the difference between the seller-purchased price and the resale price. This is accomplished by taking full tax on all sales, but refunding the tax difference to the sellers.

➢ GCC countries agreed they will introduce VAT at a rate of 5%.

➢ The introduction of VAT represents a significant change in tax policy and will have a major impact on businesses across GCC.

➢ For KSA

➢ The VAT law has been released on July 28th, 2017

➢ The draft of the implementing regulations is released for public consolation till August 19th, 2017

➢ KSA and UAE went live with VAT in January 1st, 2018

New Tax regime in KSA ….VAT in KSA & GCC Market

http://www.investopedia.com/terms/c/consumption-tax.asp

https://en.wikipedia.org/wiki/Sales_tax


SAP Solutions for Global Tax ManagementIntroducing SAPs new Tax Portfolio

SAP solutions for tax management help

companies manage indirect tax consistently

and cost-effectively, enabling CFOs to adapt to

rapidly changing regulations around the world.

They do so by digitizing tax determination,

calculation, reporting and compliance, and by

integrating them with core business processes

on a global scale.


SAP Solutions for Global Tax Management

AnalyticTransactional

Communication

to Authorities

Internal Controls

Tax Calculation

SAP Tax Service

▪ Minimize need for human

intervention

▪ Have accurate automatic tax

determination

▪ Automatic, non-disruptive

legal patches for 120

countries

Electronic Invoicing

SAP eDocuments, SAP NFE

▪ Comply with many local

regulations mandating the use

of electronic documents

▪ Simplify operations with one

user interface, pre-packaged

content and integration flows

Validation and Audit

SAP Tax Compliance

▪ Gain visibility of tax compliance

issues

▪ Automatically identifying wrong

tax data

▪ Automatically initiating correction

and documentation measures

Return Calculation and Declaration

SAP ACR, SAP TDF

▪ Manage statutory reporting

worldwide with unified user

experience

▪ Enable simple adoption of constant

legal reforms

▪ Supports different legal formats &

direct submission to authorities

HANASCP


SAP end-to-end Solution for VAT in KSA

GRC - SAP Tax Compliance

Non SAP

ERP

Non SAP

Billing

System

SAP Data Migration Service

Baseline Package

ACRERP

Baseline Package

TA

X R

ep

ort

ing

TA

X C

om

pu

tati

on

Data

Readiness

Compliance

SAP Localization Hub

APIs or Microservices

SLH-ACR: Advanced Compliance Reporting TaaS: Tax service

SAP Cloud Platform

TaaSSLH-

ACR

VAT for T&E

Vat for procurement

Vat for BYD

https://jam4.sapjam.com/groups/bTI3f6dGRUTXoitQVph0IX/documents/d2XfAeYhCETC1Q3KIU9oO7/slide_viewer

(1) Tax Computation SAP Localization Hub – Tax Service & KSA Baseline


VAT Localization Country Template for S4HANA and ERP

1 Finance

➢ Tax Conditions Types

➢ SA Output VAT

➢ SA Input VAT

➢ Access Sequences (standard MWST)

➢ Tax Procedure (TAXSAN)

➢ Tax Codes (country specific)

➢ VAT 0%

➢ VAT 5%

➢ VAT Exempted

2 Sales Distribution

➢ Access Sequences (MWST)

➢ Departure Country / Destination Country

➢ Domestic Taxes

➢ Export Taxes

➢ Condition Type

➢ SA Output Excise Tax

➢ SA Output VAT

➢ Pricing procedure (RVAASA)

➢ Customer tax classifications

➢ Material tax classifications

3 Material Management

➢ Access Sequences 0003

➢ Domestic Taxes

➢ Export Taxes

➢ Set Tax Indicator for Material

➢ Set Tax Indicator for Plant

➢ Set Tax Indicator for Account Assignment

➢ Condition Type

➢ SA Input VAT

➢ Calculation Schema (RMSA00)

Country baseline packages for KSA via SAP Note 2477105

Minimum Pre-requisites :- ECC Customers: SW component SAP_APPL – release 605 and onward- S4 Customers: all releases of S4HANA - SW component S4CORE – release

100 and onward

2477105 - VAT implementation in Saudi Arabia

2456119 - VAT Baseline Package for UAE

Pilot SAP note GCC countries

2484173 - VAT Baseline Package for Oman

2502155 - VAT Baseline Package for Kuwait

2509484 - VAT Baseline Package for Bahrain

https://launchpad.support.sap.com/#/notes/2477105






Localization – present & future

Localization done as a part of

application codebase

Build once, run anywhere with the

service approach on SAP Cloud Platform

Tax

Service




Tax computation Engine

Ship-From/Bill-From

Ship-To/Bill-To

Invoice

Tax

Configuration

Content

Tax Decision Tree

Processing using information entered in document

Tax Type

Tax Rate Type

Deductible Type

Tax Code

Tax Calculation

Tax Event Type


Tax Service Benefits

Innovation

Scale flexibility

Gain speed to market

Compliance

Legal Change

updates

Automated

processes

Cost Savings

Less maintenance

effort

Infrastructure and

project savings

One tax calculation

engine

Consistent tax

computation results

Automation


SAP Localization Hub, Tax Service – Global Coverage

Advanced

Basic

36

84

Total 120

(2) Electronic Invoicing SAP Localization Hub – eDocuments (Digital Compliance service)


Process Requirements

eDocument Regulation

Build electronic file

e-Send to public authority

Process response

e-Send to receiver

Traditional Regulation

Print invoice

Send to customer

Outbound Invoice


eDocument framework has been developed by SAP Globalization Services

▪ to comply with local regulations mandating the use of electronic documents to be sent to

business partners and/or legal authorities

Facilitates realization of different local requirements

▪ by leveraging their similarities

▪ ensuring high standards

▪ consistent user experience and lower operational cost

SAP eDocument Framework


Integration Flows

Solution Landscape – eDocument Scenarios

SAP ERPSAP SCP,

integration serviceLocal Receiver

Web Service

SAP Netweaver 7.02

SAP APPL 6.00

Web Service

Country Format Mapping

Business Monitoring

Public Administration / Tax Authority

Communication

Authentication / Digital Signature

Validation

Approval / Registration

eDocument Framework

DocumentType 2

Country A

Country B

Document Type 1


Suite

Recipient

Legal

Reports

Communication

PlatformSAP Cloud Platform Integration Digital Compliance Service 3rd Party

SAP ERP, option for e-document processing

Solution Architecture

SD Del GI SD Bill FI IS-U Real EstateMM returned

invoice

Chile Peru … Spain Netherlands Belgium Turkey

DTEPeruvian

UBL… Facturae EU-UBL UBL TR

SII SUNAT … FACeBusiness

PartnerTRA

(3) Tax Reporting SAP Localization Hub – Advanced Compliance Reporting


End-to-End VAT solution by SAP : Tax Reporting

Single framework

Unified Fiori Ux

Reporting dashboard

End-to-end reporting process

Self Service Configurations

Multiple legal formats

Data preview

Scheduling

Ad-hoc Reporting

Group Reporting

Electronic submission via HCI

Easier adoption of Legal changes

1

2

3

4

5

6

7

8

9

10

11

12

S/4 ACR and SLH ACR Main Features:



Cost Savings

Reduced TCO

Simplified implementation

with pre-packaged content

Auto Compliant

Constant adoption of

legal changes

Fiori Design

Harmonized User

Experience

User Friendly Innovation

Harnessing cloud

platform potential for

Next Generation Legal

Reporting

Advanced Compliance Reporting Service Benefits



(4) Tax Validation and Audit SAP Tax Compliance


Examples – Risks and opportunities

VAT is not added to sales invoices if a customer is not VAT-registered or a valid domestic EU VAT number is not quoted on the invoice

Manual change of the VAT classification of the customer in the sales order

Manual change of the VAT classification of the products / services in the sales order

Cross border transactions where VAT is calculated but “Zero VAT” expected

VAT not charged on sales to employees


End-to-End VAT solution by SAP : Tax Compliance

Exceptions –

Tax Compliance hits

Check Repository

1. Connect data sources Legacy SAP OracleNon

Transaction

People

Soft

Routing

CFO IA BU IT

3. Receive / validate exceptions

Check Source System CFO IA BU IT

integrated dashboard

4. Take corrective actions

Routing

Notifications

Manage

Tasks

Collaborate

Status

Workflow

Examples:

• Master data related checks

• Transaction data related checks

• Special checks like Chain transactions”

2. Manage / Optimize Checks

How does SAP deliver this?The answer is: SAP Globalization Services


Product standard globalization is…

+ +

Translation InternationalizationFunctional Localization

The foundation for globalized, localized, functioning solutions


130+countries

Globalization Services


KSA Localization Roadmap

2000 - 2012 2013 – 2014 2015 – 2016 2017- 2019

SAP ERP Foundation (Arabic + RTL + Hijri Calendar)

HCMPublic Sector (الخدمة المدنية)

Finance Private Sector

FinancePublic Sector (وزارة المالية)

* Future Roadmap topics are Subject to SAP disclaimer

Real-EstateMobile Apps &CRM Int.

SuccessFactorsArabic & EC Localization

Zakat and Tax(الزكاة والدخل)

HCMKSA Military & Defense

(الضباط و األفراد)

Arabic & RTLBI, SSM, BPC & Fiori…

* Arabic & RTLHybris MK, Digital Boardroom & Ariba

* Finance PS Updates (Payroll Posting,

Payment Order & Reporting)

* SuccessFactors

PS Personal Actions for Cloud

* Finance

S4/HANA Cloud Localization

FinanceKSA government GFSM 2014

ByDesignTax service enablement for KSA

VAT updates for KSA

SuccessFactorsVisa Management for Cloud

SuccessFactorsTickets Benefits

Defense & SecurityIndustry + Arabic Mobile Apps

HCMMuqeem Services Enablement

LC (Letter of Credit) & BG (Bank Guarantee)

HCMNew UI (Renewal interface)

HCMEnablement for HANA

HCMEC Payroll for Cloud

Arabic & RTLS4/HANA, C4C, EC, LMS & Contact

center

HCMKSA Private (قانون العمل)


S4HANA

OnPrem

S4HANA

Cloud

S4HANA OP

SAP S4/HANA … Ready for Saudi Arabia


Legal Requirements

Come unplanned Come in short notice Are mandatory Are often quite complex

Changes in Regulation

Global Requirements

Cross-country Requirements

Country specific Requirements

Core functionalities which are partly driven by local requirements, such as statutory

reports

Many countries, for instance European Union can be treated very similarly

Every country has legal requirements that differ from one country to another

Best Business Practice No legal requirement, but established practices used in a country or region

Legal Requirements & Changes in Regulations


Localization Notification Application


➢ SAP is your trusted partner for the digital transformation journey (part of KSA

2030) locally in KSA and Globally in 130 countries

➢ Tax regimes are not one time events and accompanied by frequent changes

(legal changes), SAP maintain its products to such changes

➢ SAP extends its localization benefits to entire market (SAP and Non-SAP

customers) through SAP Localization Hub cloud services

➢

Take-Away Messages

Local solutions. Global success.

Thank you.Contact information:

Khaled Musilhy

Director – Globalization Services

[email protected]

+971 56 6834589

mailto:[email protected]

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companies shall not be liable for errors or omissions with respect to the materials. The only warranties for SAP or SAP affiliate company products and services are those that are

set forth in the express warranty statements accompanying such products and services, if any. Nothing herein should be construed as constituting an additional warranty.

In particular, SAP SE or its affiliated companies have no obligation to pursue any course of business outlined in this document or any related presentation, or to develop or release

any functionality mentioned therein. This document, or any related presentation, and SAP SE’s or its affiliated companies’ strategy and possible future developments, products,

and/or platform directions and functionality are all subject to change and may be changed by SAP SE or its affiliated companies at any time for any reason without notice. The

information in this document is not a commitment, promise, or legal obligation to deliver any material, code, or functionality. All forward-looking statements are subject to various

risks and uncertainties that could cause actual results to differ materially from expectations. Readers are cautioned not to place undue reliance on these forward-looking statements,

and they should not be relied upon in making purchasing decisions.

SAP and other SAP products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of SAP SE (or an SAP affiliate company)

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