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Brexit preparations in SAP

The Brexit-Deal and SAP

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.

Plants Abroad

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

Do you have any further questions about adapting your SAP system to the changes resulting from the Brexit deal?

Free Expert Talk

Request a web meeting with one of our Brexit experts and find out how you can prepare your own SAP ERP system for Brexit

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About the author
Michaela Hoffmann
Michaela Hoffmann
Michaela Hoffmann is responsible for logistics processes in the SAP ERP area and, as a specialist in customs and foreign trade, she knows the challenges and legal requirements in customs and foreign trade processes. Based on PIKON's 3-point consulting approach, she develops solutions optimally tailored to the customer at the interface between the business processes, the underlying IT systems and the people involved.

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