Opteon today announces that the SAP proposed solution of Pro Rata VAT can be applied in Belgium. Opteon implemented the solution within one of its customers SAP Systems, as a Test Pilot case together SAP.
The SAP pro rata VAT solution had been developed specifically for Portuguese legal requirements. However, other European countries, amongst which Belgium, have public and private organizations that are considered as mixed VAT subjects: the percentage of output liable to VAT compared to output which is not subject to VAT, is to be applied to purchase transactions. This percentage changes on a yearly basis. An estimated percentage is applied during the year, upon which a correction posting will occur retroactively, once the actual percentage can be calculated.
Moving into 2010, in which the new EU VAT Directive will be applied for services, there will be an increased incentive by non profit organizations to become recognized as a mixed VAT liable subject (VAT numbers become mandatory in the B2B process flow).
The integrated SAP solution allows the user to enter a provisional applicable percentage in SAP. This percentage will be applied to the normal country specific VAT codes. Day-to-day purchasing transactions will be applying these VAT codes, and SAP will automatically apply the non deductible percentage to these VAT codes. On an annual basis, a correction will be processed to compare the provisional with the actual percentage that should have been applied. This difference (plus or minus) is then posted in the accounting system, and reported to the VAT authorities as VAT adjustments. A similar annual correction is to be done for assets.
This solution also allows the management of different deductible percentages per type of costs (legal requirement in France). This one time investment in the SAP ERP environment will provide an immediate return on investment in decreased monthly VAT adjustments to be processed manually, and in decreased lengthy annual correction exercises in determining the differences between the provisional and actual percentage to be applied.
