When deciding on a tax engine, consider the following distinctive points

Published on: 16.04.2022

Points to consider when deciding on a tax engine

‘s-Hertogenbosch, 16-04-2022: In this article we address some important points to consider when selecting a Tax engine and explain why we believe Taxmarc addresses those better than other products on the market.

– Does the solution come with indirect tax content

Taxmarc contains a standard set of tax rules, tax codes, tax rates and tax messages (required to print on invoices). Taxmarc comes with plug and play. This means that all standard SAP document flows can be handled and will lead the correct tax result. Even for tax flows spanning multiple SAP documents (Like an order with intercompany and customer invoice or an order with a drop ship PO)

– Is the solution a tax engine or does it simply map flows to tax outcomes

Taxmarc is an actual tax engine that makes decisions based on input parameters and tax rules. It doesn’t simply map a business scenario to a tax outcome but applies the tax law based on input parameters. The advantage of this is that if your business changes (new company registrations, shipping to or from different countries, using new business flows), Taxmarc handles these new processes without the need for additional setup.

– Is the solution transparent, meaning:
  • does your tax department have easy access to all parameters based on which the tax decision for a transaction was made or do you need technical support for this?
  • in case of audit can you show to the authorities based on what input the tax decision has been made?  Or is the tax determination a black box?

Taxmarc adds detailed overview screens to your sales and purchase transactions that contain all parameters used for tax determination as well as the tax result for all components in the complete flow. From those screens you can visualize the tax decision logic including the configuration settings used. A user will not need extensive SAP knowledge to analyze the tax decision.

The parameters used for the tax determination are stored in your SAP database allowing you to easily provide supporting data for all your tax decisions to the authorities in case of an audit or in case of electronic exchange of data (SAF-T, SII, E-Invoicing etc.)

As an added benefit, your company’s business blueprint is readily available in your system (I.e., what flows do you do, to what country etc.)

– Not all required parameters are available in standard SAP to perform correct tax determination, is the solution able to add these parameters?

Taxmarc adds parameters to standard SAP transactions that are required to make an accurate tax decision. Taxmarc decides what parameters are needed, based on the flow.

Example: in case of an ABC transaction, party A and B are in the EU, party C is in Non-EU. Who will do the export Party A or party B. When party B is doing this from which country? Taxmarc will require 2 additional parameters for this flow: export indicator and export country.

– Does the solution identify incompliant transactions and transactions with incomplete tax data needed to make a valid tax decision

Taxmarc comes with a Tax Control Framework (TCF). The TCF functionality is based on tax logic, and will stop  transaction that are not compliant from an indirect tax point of view.

  • It checks that all relevant tax parameters are available. The required parameters vary based on the transaction as explained above
  • It checks if the transaction is compliant from an indirect tax point of view.

Over 100 different TCF messages are delivered with a clear explanation. The reason for non-compliance is therefore totally transparent. Taxmarc doesn’t just say that ‘tax could not be determined’ but provides details and all the tools needed to analyze and solve the issue. It includes an automatic email alert.

The TCF framework makes sure that Tax is fully integrated in your business. The tax manager is no longer standing on an island waiting to find and correct all tax errors at the end of the month. He will be involved from the moment the business tries to book an invalid transaction.

– Is the solution scalable, is it able to serve your whole ERP landscape and other applications

Taxmarc is built to meet the requirements of an ever changing world. The actual Tax engine (Taxmarc Core) can be called from other SAP systems in your landscape or even from an external (non SAP) system. The Taxmarc Core is also available as a Cloud service hosted by Taxmarc.




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