The underappreciated power of SAP DaRT

During my years as a tax consultant at Big 4 firms, one challenge came up on almost every engagement: getting access to the right client data for tax analytics. SAP's Data Retention Tool — DaRT — turned out to be one of the most practical solutions I found, and one that almost nobody talks about.

Acquiring data in tax is difficult

When you work in tax and want to carry out tax analytics on customer data, acquisition is a non-trivial task. Tax data is often not a domain in business warehouses or data lakes. Installing extractors is often time-consuming and blocked by IT or data privacy officers straight away if the engagement is small. Another option, extracting tables step by step, is time-consuming and error-prone.

The data you need is already leaving the building

Therefore, starting from data that companies typically have to provide in tax audits is an excellent starting point. First, government and industry bodies have defined the data that is in scope for tax audits, a scope that is often enough for your analytics or a good starting point for further data. Second, ERP systems have extractors in place that extract the data for you. IT likes that because no new application needs to be installed in the ERP. Data privacy officers like it because it is data that would leave the company in tax audits too.

The advantages of the first point in particular should not be underestimated. When you acquire data manually, you first need to define which tables contain the data you need. If you are not very familiar with the ERP system, this is a time-consuming process with a high risk of leaving important information out of scope. Your contact in the tax department often lacks the technical knowledge — they work with an application and are not familiar with the underlying technical processes at database level. An IT system owner, on the other hand, typically does not have the domain depth to make well-founded statements across applications — even though all of these applications are tax-relevant.

In Germany, the legal foundation for this is GoBD (Grundsätze zur ordnungsmäßigen Führung und Aufbewahrung von Büchern, Aufzeichnungen und Unterlagen in elektronischer Form sowie zum Datenzugriff). GoBD defines which records companies must retain in machine-readable form and how tax authorities may access them. It distinguishes three types of access: direct access (Z1), indirect access (Z2), and data carrier handover (Z3). It is the Z3 capabilities of an ERP system that are the key to acquiring tax data easily.

What's inside a DaRT extract

In SAP, data for tax audits is extracted by the SAP Data Retention Tool. For Germany, the tables that are part of the extract were specified in a joint effort of the German SAP user group and German tax authorities. The DaRT extract is a self-describing data format that allows writing data in a type-safe way and provides ways to validate its integrity. With about 400 tables and 6,000 fields, it is a good starting point for your tax analytics.

The DaRT extract corresponds to Z3 — the company hands over a structured data file that auditors can work with independently. In Germany, tax auditors typically use the software IDEA (developed by Caseware) to analyse the extract. Although DaRT helps to satisfy the information needs of German authorities, its capabilities span different jurisdictions. Specifically, DaRT can be customized to produce the Standard Audit File for Tax (SAF-T) format that is required in many jurisdictions.

The extract covers the core areas you need for tax analytics: financial accounting (G/L entries, customer and vendor ledgers, open items), asset accounting, controlling, purchasing, and sales. It also contains a wealth of master data such as information about vendors, customers and materials. In practice, this means you have access to every posted document, the full chart of accounts, payment terms, tax codes, and the transactional data that sits behind them — all in one consistent, validated dataset.

In VAT, the domain where I have worked most intensively, you can find anomalies in general ledger postings. But you can also link the physical flows of goods with the financial flows, thereby allowing you to identify structural mistakes (e.g. you always use the wrong tax code for a particular chain transaction) or compliant processes that you should not have because they tilt too much to risk in a risk-benefit analysis.

DaRT Reader: from extract to insight

Working with DaRT extracts is not straightforward. The format is self-describing, but that also means the data arrives as a collection of (often large) files in a proprietary format that require parsing before you can do anything useful with them. DaRT Reader takes care of that. It reads your DaRT extract and gives you immediate access to the data — without needing to set up a database, write extraction scripts, or depend on your client's IT team.

If you work in tax advisory, forensics, or internal audit and want to see how DaRT Reader fits into your workflow, get in touch below to request a demo.