Tax code optimization

Numerous companies are facing issues with the lack of a validity date for a tax code in SAP

In the event of rate changes, new tax codes need to be setup. Over time, this results in a myriad of tax codes in your SAP causing confusion for your accounting department and leading to errors. Because of the multiple recent Indirect tax rate changes around the world, and the 2-character limit in SAP, companies are even running out of available tax codes.

With the integrated Taxmarc Tax Code Optimization module, no new tax codes are required in case of Indirect tax rate changes. Only the effective Indirect tax rate dates need to be changed in SAP. There will be a major reduction in maintenance effort, the risk of a shortage of tax codes is eliminated. The name and meaning of the tax code will forever remain the same, which makes life easier for your accounting employees. It also simplifies the Indirect Tax compliance processes and reports.

The main advantages of the Tax code Optimization module are:

  • The tax code optimization module is fully integrated in standard SAP (no interface used).
  • No new tax codes are required in case of rate changes.
  • A new, global, logical, tax code structure will be implemented. One tax code will have one meaning across all companies within the organization.
  • The set of tax codes will remain unchanged, leading to lower maintenance costs, less training and fewer errors.
  • Indirect rate changes can be made within 2 hours and set up in advance.
  • Avoids running out of available tax codes in SAP due to for example rate changes.
  • Tax rates are set up only at one place (the finance module) without the need to replicate these rates in your sales or purchase tax conditions. This prevents mismatches and unnecessary errors and saves on maintenance cost. Your sales and purchase tax conditions are simply set up once without a rate.
  • Reconciliation of indirect tax data across companies is easier due to uniform tax codes.
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