the VAT number or VAT ID is a separate number, that makes it possible to identify companies in the European Union. When writing an invoice for delivin the EU, the VAT number must be stated on this invoice, because of the so-called intra-community supply. This supply is VAT-exempt, if the VAT numbers are correct. The reverse charge procedure ensures that not the supplier but the recipient of the good or service in another EU country must pay the turnover tax to the local tax authorities.
Since January 1st 2020, some “quick fixes” of the rules for delivery transactions within the EU have been applied and a valid VAT identification number of the customer is now a material condition for tax exemption of the intra-community supply. The supplying company must check the validity of the VAT ID at the website of the European Commission and verify the address and name of the customer or must otherwise expect tax back payments.
The VAT ID-Check in SAP Business ByDesign can perform this very time-consuming and error-prone process instead of having to manually check each VAT at the European Commission’s site. The solution validates the VAT IDs of customers by matching it with the respective VAT IDs in the EU database and additionally matches the address data and returns to which percentage the addresses from both databases (SAP ByDesign and EU) match. Thus, it is ensured that the VAT ID, name, and address of the customer are correct.
How the VAT ID-Check in SAP Business ByDesign works
The solution checks the customers master data automatically or manually and provides mass data runs, which can be scheduled. With the comparison of existing customer data and the data of the service from the European Commission a comparison model is created, returning the percentage number of matching information to allow the user to check that the customers’ data is correct. Furthermore, data fields with the latest run and the results are added to the customer master data. This happens in a new workcenter “VAT-ID-check”. Additionally, to ensure the comparison of data in case of error, the data run results can be exported as CSV.
With the VAT ID-Check in SAP Business ByDesign the manual validation process of VAT ID can be replaced, and users benefit from simple, plannable, and automatic runs, that ensure the quality of customer master data. Additionally, mistakes by a manual verification are avoided. Finally, it can save a lot of time and avoid unnecessary costs for tax back payment. Some of our customers have been using the solution for almost a year and have already been able to make significant cost savings.
The solution simplifies and automates the process of checking the VAT-IDs of your customers from the EU and supplements the standard of SAP Business ByDesign. This enables you to save time and even costs.