As a result of Brexit, many businesses are now facing the imposition of new VAT, customs, and tariff obligations. In the first of a series of blogs we share recommendations, insights and processes that as a SAP customer you should consider undertaking.
Commodity and VAT
Now that the UK Government has an agreement with the European Commission, this means VAT & Duty rates for traded goods being imported in to the UK, and exported to the EU are charged at zero%.
What This Means?
The following VAT codes should be used:
Imports = Input VAT 0% Non EU (Code of your choice)
Exports = Output VAT 0% Non EU (Code of your choice)
Service charges to and from the EU is extremely complicated and depends on what and why the service is being delivered. We strongly recommend you take advice from your Tax Consultants.
We also recommend services charges are on separate invoices from traded goods.
There are a number of Key OSS notes that SAP are issuing as guidance. We strongly urge you to consider the information in these notes, and raise a ticket via our customer portal if you would like us to implement any changes relating to Brexit.
2768412 – Recommendations for Brexit in FI
3002286 – Important Brexit related information – Intrastat
2996657 – Brexit – Introduction of Postponed Accounting for the United Kingdom as of 01.01.2021
2997524 – Brexit: Important information for taxes in Sales
2885225 – Brexit: Through the Transition Period and Beyond
SAP are revising all their Brexit OSS notes on a daily basis, therefore the list above is not exhaustive and we recommend you contact itelligence for advice on applying any OSS notes.
The Northern Ireland Protocol
The Northern Ireland Protocol is the most complicated and has the highest number of OSS notes needing to be installed. The OSS note 2885225 – Brexit and Beyond, lists the central OSS notes which need to be applied to your system.
This list is not exhaustive and depending on your components, you may need to install more OSS notes.
You will be affected by Northern Ireland Protocol if;
– You ship to or from Northern Ireland directly from any EU Country including Ireland (Eire)
– You ship products to Northern Ireland which get held on your stock file before they are sold on to Customers
If an application creates a Finance posting or uses a VAT number, then that area of SAP will be affected. The following list is not exhaustive;
Core On-Premise, C4C, CRM, MDG, GTS, SRM, Ariba.
If VAT registration numbers are taken in to BW, BW reports could also be affected.
Further information and reading
The following links will provide you with further insight:
If any of the recommendations listed above has given you something to consider or you’re considering the impact of Brexit on your SAP system, then itelligence can help.
Please raise a ticket initially via the portal so we can capture that question or request.
Remember to check back regularly for the next in our Blog series on Brexit and your SAP system.