Glossary

Issue

Many SAP standard reports commonly used for Tax Reporting purposes in SAP ECC have run out of SAP support and have been replaced with reports in the Document and Reporting Compliance (DRC) framework available in S/4 HANA. The usage of SAP DRC in S/4 HANA has implications on licensing requirements as well as other project considerations such as training needs and business process change and shall therefore be assessed further as part of this KDD.

Recommendation

To ensure continuity of regulatory compliance in S/4 HANA for statutory submissions and to provide the users with a powerful, intuitive and state-of-the-art tax reporting frameworks, a move towards SAP DRC seems inevitable. Sticking to an obsolete and outdated tax reporting framework which has already reached or is nearing the end of their lives from a SAP support and product development perspective in a new S/4 HANA implementation is heavily contradicting the idea of building a future-proof solution.

Background & Context

SAP DRC in S/4 HANA for statutory reporting purposes is a powerful tool that facilitates monitoring, preparation and submission of numerous statutory reports to government and fiscal authorities but many of its functionalities require additional licensing.

Syensqo is currently using various tax applications for compliance, reporting and lodging purposes. While some of these applications allow for seamless integration with SAP as the source system for regulatory filings and reporting, the business is still relying on supporting reports from the underlying SAP transactional accounting system especially in countries where no automated or only semi-automated solutions are in place for tax reporting and submissions. In a growing number of countries around the world it is nowadays also a legal requirement to integrate the accounting system with government portals for direct submissions of statutory filings to the authorities (e.g. 'Make Tax Digital' initiative in the UK for indirect tax submissions).

The following list shows a non-exhaustive selection of commonly used SAP standard reports for tax reporting in ECC systems for which SAP support and further product developments to keep the reports up-to-date with latest changes in regulatory requirements has either ceased or is about to reach this stage in the near future - for a full list of no longer supported standard SAP reports for regulatory and statutory reporting and submissions, please refer to SAP note 2480067:

Assumptions

• The licensing requirements for SAP DRC in S/4 HANA for Statutory Reporting are not clearly documented. Infrastructure team was consulted and advice given is to assume that the scope of functionalities provided by SAP DRC for Statutory Reporting compliance will be a chargeable service in the to-be solution. 

Constraints

Impacts

• Licensing: Additional licenses will be required to leverage on SAP DRC for Statutory Reporting in S/4 HANA.
• Data Cleansing and Migration: No impact.
• Training and Change Management: Extensive training will be required as SAP DRC is a new functionality which brings about changes to the current ways of working. On top of that, it is a Fiori-based application with a completely different look and feel compared to the old Tax Reporting framework which mainly consisted of ABAP reports.
• Automation: Statutory Submissions can be scheduled as regular batch jobs to ensure timely submissions to the authorities. Monitoring and alert functionalities are also available to avoid overdue submissions.

Business Rules

None identified in conceptual design phase - this section may be revisited again during detailed design as underlying business processes leveraging tax reporting functionalities are investigated in more detail.

Options considered

Option A: Deploy and Utilize SAP DRC in S/4 HANA for Statutory Reporting

Option B: Use classic Tax Reporting framework instead of SAP DRC in S/4 HANA for Statutory Reporting

Evaluation

	Option A	Option B	Option C	Option D
Criterion 1	Pro Con	Pro Pro	Pro Con	Pro Con
Criterion 2	Pro Con	Con	Pro Pro	Con Con
Criterion 3	Pro	Con	Con	Pro

See also

Change log

Workflow history