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SAP tax calculation service

Companies across the world access new markets and embrace emerging business models, and SAP enables them by being a key partner in this journey across the world. A critical aspect of this is the localization of our customers’ global landscapes to ensure compliance. SAP HANA Cloud Platform’s business services enable this by offering localization capabilities as cloud based APIs. SAP tax calculation service offering within the SAP HANA Cloud Platform available as a REST API offers tax determination and computation powered by years of expertise that SAP has had in enabling our customers across the world .

The service offers global tax compliance by covering the legal aspects of tax computation for 75+ countries. Apart from the common list of countries like US, Canada, Australia & those in Western EU, it offers coverage for LATAM countries like Mexico & Brazil, Asian countries like China, Japan & India and Eastern EU countries. More countries are being added based on inputs from our customers.

The tax service offers the following features:

  • Pre-delivered tax computation content
  • Legal changes pertaining to tax calculation are kept updated in the service
  • Ability for customers to fine tune and configure the tax computation
  • VAT calculation for 75+ countries
  • Withholding tax computation
  • Deferred tax, deductibility and other financial relevant indicators
  • Support for tax exemptions with legal reasons and certificates
  • Multi-currency support and time bound tax rate support
  • Support for most business process steps that need transactional tax computation like catalogs, contracts, requisitions, orders, carts, checkouts, invoices, advances and payments for both the purchase and sales side transactions
  • Support for different tax computation sequences like net and gross
  • Import and Export taxes
  • All special tax situations like Reverse Input Tax Credit (RITC) for Canada, Reverse Charge for asset acquisition & triangulation within EU countries, Service tax / Excise tax / Cess for India, VAT withholdings for Mexico etc are fully covered
  • The tax service uses the SAP HANA Cloud Platform as a central provisioning layer. It offers RESTfull services as APIs from this layer. The API can be directly integrated to any HCP application that has a need to calculate tax

The tax service on HCP is currently in private beta, and can be tested within the SAP YaaS marketplace. Here the service does a determination of the country of taxation and natively understands the ‘default’ (VAT) situation for that country including components and rates. This information is passed back as the tax lines relevant for the country / jurisdiction with the corresponding amounts.

 

Following are the steps to access the tax service –

 

  • Access https://www.yaas.io/ (currently private beta) and register
  • Once you have a user ID, login and go to the YaaS marketplace (https://market.yaas.io/#/packages/)
  • Click on SAP Localization Hub: tax (preview)
  • This gives you access to the documentation and capabilities of the tax service
  • Subscribing (free trial access) to the service gives you access to the tax service on the Hybris portal and tax enables your web store
  • All that is needed is to pass the transaction context to the service to identify the locations (shipping addresses etc) to get back the total tax amount

 

For a more detailed step by step description follow this blog.

 

One of the central differentiators of the SAP tax calculation service is the tax configuration content which is pre-delivered and bundled with the service. The localization know-how and global presence that SAP has, is effectively utilized here to engage with various legal bodies globally, interpret the changes on laws of taxation and convert those in the form of content that governs the tax service. This content is seamlessly pushed to the cloud hosted service so that the consumer always stays compliant for tax determination and calculation.

The tax calculation service is currently in the private beta phase (non-productive use only) and will be generically available soon. It will follow the standard SAP HANA Cloud Platform API pricing.

For queries contact: Praveenkumar A K or Sridhar Sundaram

35 Comments
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  • Thanks for the information….comparing to the partner offerings, this is finally something way over due from SAP.

    Question: can we take advantage of this service if we are on ECC on premise, not on HANA ?

    In Latin America, does this service cover the government e-invoice “stamp” needed on invoices ?

    Thanks,

    Peter

    • Thanks Peter.

      Our current use-cases are for HCP  / YaaS based developments which need tax calculation where the API can be called.

      The hybrid consumption case that you mentioned (ECC calling the hosted tax service) is not enabled currently.

      Regarding the second point you mentioned on e-invoicing etc, please note that the tax service follows a micro-service architecture. This means the digital signing / government interfacing etc that are needed for the tax invoice, is not part of the tax service which is specifically aimed at tax determination and computation. But, at the same time we are looking at more micro-service based APIs to be added to the HCP business service library which can holistically enable compliance aspects for countries. Here, one of the services could be government e-invoicing for “stamping” etc.

      Regards,

      Praveen

      • Thanks, Preveen.

        For global companies running SAP, the e-invoice trend in Latin America countries presents huge challenges and a great opportunity for service providers.  Cannot wait to see SAP step up onto the plate in this area….will keep eyes open for the announcement fro you, hopefully soon.

        thanks again.

  • Hi Praveen and Sridhar,

    How does this service compare to the tax engines provided by Thomson Reuters (OneSource Global NEXT) and Vertex.

    Who provides the content for the service (rules and rates etc…).

    Thanks,

    Martijn

    • Hi Martjin,

      The content for the service is provided by the SAP Globalization Services team. This team has a global localization product management network and over-all delivers more than 1000 legal changes an year (across all domains – not just tax). This network ensures that tax related legal changes are identified early and delivered as content changes to the cloud hosted service.

      Currently we do not have a comparison study with other tax engines.

      Thanks,

      Praveen

  • Hi Praveen and Sridhar,

    How does this service compare to the tax engines provided by Thomson Reuters (OneSource Global NEXT) and Vertex.

    Who provides the content for the service (rules and rates etc…).

    Thanks,

    Martijn

  • If multiple countries involves each country has its uniue tax code to evaluate, it will not be possible for Enterprise Buyer to connect directly to an external tax system.

    For example, if both US tax and European tax are needed, you have to use TTE or R/3 for tax calculation.How they seperate the tax code for each country while having start with same letter..

    • Hi Mathew,

      The tax service works for operational in-direct taxation.

      The way in which tax calculation proceeds is: Determine the tax country (based on taxable at source or destination) –> determine the applicable tax components –> determine rates based on jurisdiction / product or partner exemptions. This is true for triangulation or drop-ship kind of scenarios as well.

      So in first step the tax country determination happens and the rest follows. Do you have specific cases where you see issues in country of taxation?

      Please note that tax service is an independent service and not embedded inside R/3.

      Praveen

  • Hi Praveen and Sridhar,


    Does the SAP Globalization Services team also deliver the tax content?  For example the rates for GST .

    Best Regards,

    Peter

  • Hi Praveen,

    Can you provide us with more detailed information how this solution will work : we have especially following questions :

    • What is the technical landscape of this Tax Solution and what are the possible deployment options?
    • What is the scope : geographical and process wise ( which type of VAT, Tax flows are supported .)
    • How can we get access to the beta version ?
    • What is the role of the partner network in developing the final application?
    • Where can we find additional information regarding set up, customizing, etc…

    Thanks in advance
    Regds
    Frank
    Deloitte
     

  • This is the first & best article to make me satisfied by presenting good content. I feel so happy and delighted. Thank you so much for this article.

    By

    NaviRaj

     

  • Nice article. The integration of the SAP Localization Hub enables a robust, adherent, flexible and always up-to-date solution for the tax & tax feature for any size market, allowing us the determination & calculation of the taxes in a fully cloud based SaaS platform solution integrated with the help of SAP S/4HANA Cloud solutions

    Great blog Thanks for sharing.

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