SAP has a long tradition in providing localized country versions for Brazil: starting with R/3 release 3.0, the very particular business processes involving Nota Fiscal (a tax invoice on all goods movements and services) and a very complex calculation of multiple indirect and withholding taxes have been part of the standard delivery of our ERP software. This was a big differentiator to other multinational ERP software providers and led to an unequalled market success of SAP in Brazil, which in 2013 turned the 3rd largest market afer US and Germany.
However, while SAP provided the necessary core functionality to run the daily business processes, ever since there has been need for complementary software provided by SAP partners to handle the inumerous legal obligations: tax reports on federal, state and municipal level and a scores of other ancillary obligations. It is not uncommon for a midsize company with reasonable geographic presence to be subject to more than 1000 obligations per months.
So far, the eco-system has been able to fill this white-space, but over the past years the accelerated dynamic of Brazilian legislation (introduction of electronic Nota Fiscal NF-e, digital bookkeeping and fiscal reporting SPED) and the constantly growing amount of fiscal data makes it ever more challenging to manage all obligations adequately with the complex landscape of SAP and non-SAP bolt-on applications.
The SAP Tax Declaration Framework for Brazil (TDF) which was launched in December 2013 is intended exactly to alleviate this pain point by providing a modern platform on SAP's high performance in-memory database HANA where companies can consolidate all fiscal and reporting relevant data from multiple SAP and non-SAP backend system in a central place, the so-called Central Tax Repository (CTR). This repository has been modeled in a way that it synchronizes in real-time with SAP ERP data (accounting documents, invoices etc.) and maps it via views into a format according to specification by the Brazilian government. It hence allows partners (and customers) to very easily build applications using the metadata with standardized semantic, i.e. without having to know SAP proprietary data type definitions.
The TDF version 1.0 provides APIs that generate the SPED fiscal file (EFD) and accounting file (ECD) which can be consumed by fiscal applications of SAP partners. These can be seamlessly integrated with other features which directly consume the CTR data (which is extensible to account for data not currently covered by the SAP delivered data model), e.g. to validate and audit data, calculate tax returns for the various indirect and direct taxes and generate all kinds of legal obligations. The TDF provides governance, monitoring and traceability and allows adjustments and accounting postings (e.g. of tax returns) to the ERP backend.
The benefit for customers is manyfold:
- Consistent tax data in a central repository, synchronized in real-time with the ERP backend systems
- Standardized interfaces and database as part of SAP product, hence maintained and updated in the event of legal changes
- Greatly reduced time to process period-end closing activities
- Greatly reduced risk of fiscal non-compliance.
At the moment, SAP is extending the TDF with functionality to attend the new labor legislation "eSocial" which will come into effect by June 2014 and requires transmission of periodic events (such as payroll) and non-periodic events (changes in employee data, work accidents, 3rd party service providers etc.) via Web Service. Apart from extending the CTR to accomodate these payroll and social data, functionality to transmit the events to the government (XML mapping and communication) will be added to the TDF.
The development has been done in Co-Innovation with two key customers Gerdau and Petrobras and currently 7 partners engaged via SAP Co-Innovation Lab (COIL) and the project is open for further collaboration.
Further topics on the roadmap for 2014-2015 include:
- Solution for control of tax credits on fixed assets (CIAP, EFD Bloco G)
- Solution for control of inventory and production (EFD Bloco K)
- SPED for Contributions (EFD Contribuições)
- SPED for Income Tax (ECF)