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Tax Service: Calculate Indirect Taxes in SAP S/4HANA Cloud and on-premise

NOTE: This blog post, originally published in 2019, contains information related to an older version of this product. For information about the integration with external tax calculation engines, please see Integration with External Tax Calculation Engines – New Integration for SAP S/4HANA Cloud and SAP S/4HANA.

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Are you an SAP S/4HANA user interested in easily determining and calculating indirect taxes in your business transactions (such as sales and purchase orders)?

Do you want to ensure compliance by delivering in-time tax updates?

If your answer is yes, then keep on reading!

In this blog post you will learn a bit more about the SAP Localization Hub, tax service and how the service can help you ensure you have correct and consistent calculation of tax in your SAP S/4HANA system.

SAP Localization Hub, tax service helps you to determine and calculate applicable country/region-specific indirect taxes and stay legally compliant. It is a cloud based (multi-tenant) API that gets relevant data from applications, performs the tax determination/calculations and then returns the correct tax amounts. You can use the service’s own calculation engine or integrate a partner solution to conduct your business operations.

If you’re working on SAP S/4HANA or SAP S/4HANA Cloud, you can integrate the tax service to easily calculate taxes in business transactions in your system.

This means that when you create or edit business transactions, SAP S/4HANA (cloud or on-premise) sends the data required to determine and calculate taxes to the tax service. The tax service uses its own calculation engine or the service of a partner to calculate these taxes according to local guidelines and sends the results back to SAP S/4HANA.

This ensures that you can increase efficiency and focus on your key tasks due by using a low maintenance tax calculation engine in a centralized service in the cloud!

Do you want to know more details about the tax service and supported countries and regions? Then have a look at the service’s documentation in the SAP Help Portal.

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