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Don’t Block a Tax Rate – Add a Validity Period

Don’t Block a Tax Rate—Add a Validity Period

As the saying goes, there are two certainties in life: death and taxes. And a certainty about taxes is that they will change from time to time. When tax rates change, the maintenance load on your business can be high–there are many tables that need updated, transactions and records that need to be checked, and that’s just for starters.

 

Previously, one way to deal with a VAT change would be to have your configuration expert set a tax code as “Inactive,” a process that might also have required you to contact SAP for support in making that change.

 

Now you have a second option: In countries where time-dependent tax calculation (TDT) is active, you can simply add a new validity period to your existing tax codes.

 

Here’s a sample case.

 

In the original question, we have a VAT that changed from 14 to 15%, which previously meant blocking existing tax codes and creating new ones. Instead of that, in this case, you could simply add validity periods to your V1 and A1 codes (and any others as necessary). A simplified end result would look like this:

 

Tax Code Old Validity Old Rate New Validity


New Rate

A1   01/01/1900 – 31/03/2018   14%   01/04/2018 – 31/12/9999   15%
V1   01/01/1900 – 31/03/2018   14%   01/04/2018 – 31/12/9999   15%

Note: The beginning dates of the old validity period and ending dates of the new validity period shown here are the system defaults; your validity period dates may vary.

 

The key element here is the dates that are in bold: The 14% tax rate is valid through March 31, and the 15% rate is valid as of April 1. No need to change codes and vastly reduced mainteance–it’s a change your configuration expert can make, and it’s a much simpler way to maintain your tax rate information.

 

There’s plenty more about time-dependent tax calculation, and you can see the information here, on the SAP Help Portal. We also have two how-to videos, one that covers activation and the second that covers using time-dependent taxes. You can access them here:

 

Activating Time-Dependent Taxes (SAP)

Activating Time-Dependent Taxes (YouTube)

 

Using Time-Dependent Taxes (SAP)

Using Time-Dependent Taxes (YouTube)

 

Hopefully, this makes your tax calculation and reporting a bit easier. If you have any questions about TDT, please do reach out and let us know!

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