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Author's profile photo Lizandro Martins

Integration with External Tax Calculation Engines – New Concept for SAP S/4HANA Cloud and SAP S/4HANA

The SAP Localization Hub tax service is in maintenance mode, so I want to share with you a new concept for integration between SAP S/4HANA Cloud and S/4HANA with external tax calculation engines. This integration enables tax calculations for specific business transactions according to the guidelines of the tax authorities for the supported countries, regions, and scenarios.

The figure below presents a new concept based on the SAP Cloud Platform Integration, which is a default SAP tool for integration, The SAP Cloud Platform is the router between SAP S/4HANA Cloud, SAP S/4HANA, and External Partners.

SAP provides default integration templates (highlighted in green in the figure above) that must be deployed and configured in SAP Cloud Integration. In this configuration, you can define routes to a specific partner or define different combinations of routes and partners using parameters existing in the message header received from SAP S/4HANA Cloud and SAP S/4HANA, as shown in the figure below:

You can specialize templates both for enriching data for tax calculation and determining combinations of routes and partners according to your business needs. A given business process can be routed to one partner, while a separate process is routed to another partner.

Very important information for you: The business scenarios covered, countries/regions, API, and connection configurations within SAP S4/HANA Cloud and SAP S/4HANA remain the same as used by the Tax Service. No impact is caused to ongoing projects or production environments. For more details, go to the Integration API.

With the new integration concept presented, at this moment, you may be wondering: Where do I access the request and response payloads for auditing that was in the Tax Service? Access to the Audit Log (highlighted in blue in the first figure) is now accessible within SAP S/4HANA Cloud and SAP S/4HANA.

NOTE: To access this feature in SAP S/4HANA Cloud, use the Tax Service Trace Transaction. For SAP S/4HANA, use TXS_TRACE transaction

For more details about Integration with External Tax Calculation Engine and Audit Log, have a look at the documentation in the SAP Help Portal.



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      Author's profile photo Renan Correa
      Renan Correa

      Oi Lizandro,

      All good?

      I'm following the tax service for some time and I wanted to confirm if I understood your post correctly. The new concept is this integration process (iFlow?) in SAP BTP where a customer can do the routing of the requests to different partners depending on the context. Is it? So it does not use the concept of "SAP Localization hub, tax service" anymore and it's technically considered just a call to SAP Cloud Integration.

      I also understood that around mid last year SAP anounced the tax service would be in maintenance mode and only Brazil would be supported ( no longer available for US and canada ) via external tax engines from partners, is that going still in the same direction?


      Renan Correa