Since the UK and the EU agreed on a trade agreement at the last minute in the BREXIT negotiations, we can finally align our SAP systems with a DEAL scenario.
The EU-UK Trade and Cooperation Agreement (TCA) is by no means a substitute for membership in the customs union of the European Union.
Instead, as with any other trade agreement, it is also important to check your own products with regard to the conditions of the TCA and to correctly prepare the proof of origin, customs declarations and freight documents. Only then can you benefit from reduced tariffs.
What does this mean for the use of SAP?
In the present DEAL scenario with trade agreements, too, we have to adapt the logistics processes and financial transactions in our SAP systems so that Great Britain will be treated as a third country in the future from the EU’s perspective.
This applies, for example, to the SAP function for plants abroad (WiA). This function could be used to supply warehouses in another EU country without their own company code with deliveries and to map these transactions correctly for tax purposes. Since goods deliveries to Great Britain will in future no longer be intra-Community shipments but rather exports, the Plants Abroad function can no longer be used for this.
If you operate a warehouse with the WiA function, you should check whether it is necessary to create your own company code and thus your own company for Great Britain.
Origin of Goods and Preferences
Anyone who has not yet dealt with the subject of the origin of goods should definitely do so from now on. Because in order to be able to use the reduced tariffs, which were agreed in the TCA, the goods must meet the specified conditions. The origin of the goods plays a central role. Goods that are proven to come from the EU can be imported into the UK duty-free. Conversely, the same applies to goods that can be shown to originate in the UK.
For German companies, there is more information on this on the German customs website: BREXIT origin of goods and preferences
For the SAP logisticians, it is important to analyze the flow of goods and check their processes for the new conditions. One can start from the following principle: what is delivered where and to whom?
The customs measures are based on the goods sent, which are identified by the customs tariff number. If you previously traded with British companies and would now like to import goods to Great Britain yourself, you should check the tariff for imports to Great Britain or maintain it accordingly in the SAP system.
Embargoes and Sanctions
Regarding embargoes against states and sanctions against organizations and individuals, I recommend referring to the current national lists.
The classification of dual use items should be reviewed if you are based in the UK.
Tax Determination and Master Data
Tax determination in the SAP modules SD and MM must also be adapted so that transactions with customers and suppliers from Great Britain are correctly mapped as third-country transactions for tax purposes.
This also requires adjustments to the master data. On the one hand, regions are to be maintained for customers and suppliers from Northern Ireland with immediate effect. On the other hand, the condition records for tax determination must be checked and, if necessary, adjusted depending on the changed business partner master records.
Please note that the special regulations for Northern Ireland only affect the movement of goods, but not services.
If you are delivering items up to and including £ 135 net retail price to retail customers in the UK, please note that these items are subject to UK VAT.
For German companies, the pages of the Chambers of Commerce and Industry are good sources of information, e.g. changes in deliveries to British end customers
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Important SAP notes for BREXIT
Please pay attention to which notes are valid for your respective ECC or S/4HANA system and the respective release status.
2885225 – BREXIT: Through the Transition Period and Beyond
Please also refer to the FAQ document from SAP Globalisation Service attached to this note.
3000315 – Brexit: consequence for Plants Abroad/WIA (SD perspective)
3002286 – Important BREXIT related information – Intrastat
2997524 – BREXIT: Important information for taxes in Sales
2999098 – Purchase Order tax code determination changes for Brexit
3007317 – BREXIT: Tax code determination for business with Northern Ireland on SAP ERP
Also valid in the DEAL-scenario:
2768412 – Recommendations for Brexit in FI
Correction of the VAT registration number
3004082 – Brexit: EC sales list – VAT registration number
2879848 – TTP2357: Preference, Brexit
Adaptation of Customer/Supplier master data
2998897 – BREXIT: Adaptation of Customer/Supplier master data for Northern Ireland Protocol-Part 1
2999507 – BREXIT: Adaptation of Customer/Supplier master data for Northern Ireland Protocol-Part 2
2999508 – BREXIT: Adaptation of Customer/Supplier master data for Northern Ireland Protocol-Part 3