Auto parts company evolves its tax operations on SAP S/4HANA and prepares ahead for the Tax Reform with TTAX
With a strong global presence and strategic manufacturing plants in Brazil and abroad, the company in question is one of the largest and most respected Tier 1 suppliers in the automotive sector. It is a benchmark in the manufacturing of highly engineered components (such as oil seals, gaskets, and sealing systems) for the world’s leading automakers.
In the auto parts industry, billing operations cannot stop: delays in tax document issuance or tax inconsistencies can halt the assembly lines of massive clients, leading to heavy fines and breaches of contract. For this reason, the company has always treated tax governance within its SAP ecosystem as an absolute priority.
The Challenge
The company was already a long-time TTAX client in the SAP ECC environment, where it successfully used the fiscal solution and outbound messaging system to ensure compliance across its manufacturing plants. However, to keep pace with the group’s global digital transformation, the company initiated a strategic migration to the next-generation SAP S/4HANA platform.
The major challenge for both the IT and tax departments was to ensure that all the tax intelligence built over the years in ECC was preserved and updated for the new S/4HANA architecture, without causing any impact on daily shipments. Furthermore, the company’s leadership identified this migration as the perfect window of opportunity to structurally prepare the new ERP for the profound changes brought about by the Brazilian Tax Reform.
The Solution
The trusted partnership with TTAX enabled a secure, rapid, and future-focused transition for the auto parts manufacturer’s tax operations:
1. Migration of the TaxOrion Fiscal Solution to S/4HANA
TTAX led the evolution of the TaxOrion Fiscal Solution from the ECC environment to the new SAP S/4HANA platform. As a natively developed tool (ABAP/Fiori), TaxOrion integrated seamlessly into the ERP’s new architecture. This ensured that the complex business rules of the automotive industry were migrated with total integrity, providing the tax team with a modern, fast interface without requiring retraining or disrupting existing processes.
2. Native Implementation of the Tax Reform
Leveraging the new S/4HANA environment, TTAX implemented its dedicated Tax Reform Suite. The fiscal solution was parameterized to support the country’s regulatory transition, enabling the company’s ERP to accurately process the Dual VAT framework (IBS and CBS), the new destination-based tax rate rules, and the Split Payment mechanism.
3. Outbound Messaging Evolution
The Outbound Messaging system, which already secured the company’s outbound flows in ECC, was fully integrated into the new S/4HANA framework and prepared for the Tax Reform. The messaging engine was updated to support the new layouts and XML file fields required by national tax authorities for validating product and service invoices, ensuring uninterrupted billing operations for the automakers.
The Result
The technological evolution coordinated by TTAX consolidated the multinational’s tax ecosystem as a benchmark of efficiency for the global group:
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Zero-Risk Go-Live: The migration of TaxOrion and Outbound Messaging to S/4HANA was executed seamlessly, keeping the manufacturing plants’ shipping workflows operating at maximum capacity and completely friction-free.
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Reduction in Costs and Customizations: By adopting TTAX’s native technology tailored for S/4HANA, the company’s IT department eliminated the need for expensive and complex in-house development to comply with regulations.
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Early Readiness for the Tax Reform: While the market is still searching for last-minute solutions, the auto parts manufacturer already operates within an SAP environment fully structured and prepared to absorb the new Brazilian tax rules automatically.
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Enhanced User Experience: The tax team now operates within an environment 100% compliant with the SAP Fiori standard, gaining agility in data analysis, audits, and daily tax reconciliations.