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Input tax deduction for mixed purpose expenditures - audit-proofed with VERA

Increase the volume of deductible input tax

Input tax deduction for mixed purpose expenditures

Whenever a company with non-taxable and taxable sales asserts the amount of deductible input tax, a wide range of requirements have to be met. The tax authorities require the allocation of the taxed expenditure to the corresponding output revenue. In practice this direct allocationbecomes a challenge especially for banks, insurance companies and health organizations. The majority of revenues are exempt from tax and consequentially exclude the deduction of input tax. However, there are taxable or non-taxable but deductible expenses, for instance cross border transactions.

VERA - the only software for input tax distribution

The solution is a system to determine direct allocation. This procedure is the core of our VERA software. VERA assigns the correct deduction rate for each relevant business transaction. You will never be left with the pro rata key due to a lack of alternatives again.

Gross- or net postings? Irrelevant!

With VERA, you streamline accounting procedures and automate the process of deduction - while the tax department is fully in charge of the input tax deduction. VERA is separating the input tax distribution from initial posting of the invoice. The posting of deductible input tax is determined independent of tax codes and based on master data defined by the tax department. The complete integration into the ERP-system allows the automated evaluation of every relevantbusiness transaction as well as adjustment postings entirely within your ERP-system.

Audit conformity and compliance

All legal requirements are met; in addition, the embedded information system provides comprehensive support for tax audits. The identification and audit-proof documentation at line item level allow for the disclosure of the deduction potential as well as the transparency of its audit trail. As a result of the process optimizations by VERA, tax departments can now focus on the determination of the deduction rates as well as the evaluation of special cases. Consequently, currently over 100 businesses rely on VERA as their solution for the input tax deduction.

§ 15a VAT Act

In addition, VERA is setting up adjustment objects for all circumstances that are subject to §15a of the German VAT Act (UStG). During the entire observation period, these are reviewed for any changes on a monthly basis. VERA performs input tax adjustment postings, which are determined accordingly and records all transactions for each adjustment object within VERA.

VERA's Key Benefits

  1. Optimization and automation of the reporting process for input tax
  2. Compliance with all legal requirements
  3. Expandable for country-specific requirements
  4. The detailed and individual breakdown of deduction rates for input tax regarding accounts, cost centers, internal orders, projects, WBS elements, and real estate
  5. Provision with clear time reference incl. audit-proof documentation of all corrections
  6. Technical environment: Fully integrated into the SAP system or connected via an interface

Once the input tax has been processed and posted...

...you have to report to the tax office. Our SARA solution is the only add-on that maps the entire sales tax reporting process within your SAP system. Read more

Your contact
Miklós Hegybiró

Miklós Hegybiró

Senior Vice President 
miklos.hegybiro@ikor.de
Tel. +49 (0)40 8 19 94 42-0

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