External Tax Calculation Engines - How to Use Custom Sales Pricing Procedure in SAP S/4HANA Cloud

[lucas_baldo]

Note: This blog post, originally published in 2020, contains information related to an older version of this product. For information about the latest version, please see Integration with External Tax Calculation Engines – New Integration for SAP S/4HANA Cloud and SAP S/...

Note: Automatic Tax Code Selection, as described in this blog post, is no longer supported for the Canadian scenarios, in spite of being used in the examples.

 

In SAP S/4HANA Cloud you can create your own Sales Pricing Procedures. If you want to use external tax calculation engine with this pricing procedure, have a look at the steps below.  

Note: You can use custom sales pricing procedures in SAP S/4HANA (on premise) by executing the steps described above. for that, access the SAP Customizing Implementation Guide > Integration with Other SAP Components > SAP Localization Hub, external tax calculation engines: 

• Map Tax Results to Condition Types (Sales Pricing Procedure) 


• Map SAP S/4HANA Tax Codes to External Tax Codes 


• Activate the External Tax Calculation Engines for Tax and Pricing Procedures 

note: Not available for Brazilian scenarios. 

Create your own Sales pricing procedure 

1. Login to the Fiori Launchpad with the BPC_EXPERT role. 

2. Access the Manage Your Solution tile and choose your country.  

Example: for this scenario, I chose Canada.  

3. In the Configure Your Solution app, filter with the following information:

Application Area	Sub Application Area
Sales	Price Management

4. Choose the Pricing configuration item. 

5. Choose the Set Pricing Procedures configuration step. 

In this step, you can create a completely new sales pricing procedure or copy from an existing one. For this example, I chose to copy from Canada Sales pricing A29010. 

Position the condition type TXSC in the step that is above the condition types that represent taxes. In this example, TXSC is positioned right above condition types JRC1, JRC2, JRC3 and JRC4, which represents Canadian taxes GST, PST, QST, and HST respectively.  

Additionally, TXSC and all subsequent tax condition types must have the alternative calculation field with condition formula 279, like in the picture below: 

Map Tax Results to Condition Types  

After your own sales pricing procedure is created, you need to map the tax service results into the corresponding pricing condition types. See the steps below to execute this mapping. 

1. In the Configure Your Solution app, filter with the following information: 

Application Area	Sub Application Area
Finance	Integration

2. Choose the SAP Localization Hub, External Tax Engines configuration item. 

3. Choose the Map Tax Results to Condition Types (Sales Pricing Procedure) configuration step. 

4. Select the pricing procedure you created and choose Custom Mappings. 

5. Map each tax condition type to the correct external tax code, tax type code and due category coming from External Tax Calculation Engines response payload. For more information on how to execute this mapping, see the configuration step documentation under Configuration Help. 

 

Example: I’m using the scenario of Canadian domestic sales of material from Alberta to Ontario, resulting in Regular HST Sales with HST 13% tax rate. Below you can see the response JSON payload for this scenario: 



Keep in mind that there are three pieces of information here that are important for the SAP SAP S/4HANA Cloud mapping:  

• taxcode 511 representing the Regular HST Sales transaction; 


• taxTypeCode 2 representing HST tax; 


• dueCategory P representing a payable position. 

 

So, this is the entry I need to add to my new Sales pricing procedure; 



This entry means that whenever the tax service returns the Regular HST Sales scenario (represented by tax code 511), the base amount, rate and amount of HST tax (represented by taxTypeCode 2 on payable position) will be mapped to pricing condition type JRC4. 

 

Map SAP S/4HANA Cloud Tax Codes to External Tax Codes 

Next, you need to inform which SAP S/4HANA tax code will represent the tax service’s Regular HST Sales scenario, represented by external tax code 511.  

1. In the Configure Your Solution app, filter with the following information: 

Application Area	Sub Application Area
Finance	Integration

2. Choose the SAP Localization Hub, External Tax Calculation Engines configuration item. 

3. Choose the Map SAP S/4HANA Tax Codes to External Tax Codes configuration step. 

Now map the S/4 tax code to the external tax code. The external tax code comes from the tax service response payload. 

Example: tax codes are related to a country tax procedure, so I will select Canada tax procedure 0TXCAJ for my scenario. 



In this way, we are informing the SAP S/4HANA Cloud system that whenever the external tax calculation engine responds to the scenario with the external tax code 511, SAP S/4HANA Cloud must use the SH tax code for accounting and later reporting. 

 

Activate the External Tax Calculation Engines for Tax and Pricing Procedures 

The last step is to activate the external tax calculation engines so the sales pricing procedure you just created uses it.  

1. In the Configure Your Solution app, filter with the following information: 

Application	Sub Application
Finance	Integration

2. Choose the SAP Localization Hub, External Tax Calculation Engines configuration item. 

3. Choose the Activate the External Tax Calculation Engines for Tax and Pricing Procedures Map SAP configuration step. 

4. Add the pricing procedure you created with the following information: 

• 
  
  
  
  • Usage: A 
  
  
  • Application: V 
  
  
  • Activate flag: checked 
  
  
  
  

5. Choose Save. 

Example: This is the entry I added for my Sales pricing Z29010. 



A means Pricing Usage Condition and V means Sales/Distribution application. 

Result: Now your new sales pricing procedure is ready to be used! You can either use it on a specific business partner or assign it to a sales organization.