SAP add-on: never run out of tax codes

Multi billion Euro companies operate with Taxmarc™ Tax Code solution already for many years

Many SAP clients have multiple VAT registrations (in 10+ countries), principal structures, complex business model for sales of goods, cross-border, drop shipment, shortage tax codes (use of 900 + SAP tax codes) and centralized functions.

These organizations will face difficulties to solve the shortages of tax codes issue causing not only tax compliance, but commercial issues as well. SAP developed a CDP solution on a 4 digit tax code. We understand that this SAP 4 digit tax code solution will not be rolled out to other customers because of risks around the stability and robustness of the solution.

This means that multinational companies still have limited options when facing issues with the limited number of available tax codes.

Alternative market solutions

1. Use the special characters ($,/,\,& etc.) for the tax code – even with the extended number of tax codes some companies will be running out of available tax codes and tax codes with these special characters are not user friendly to work with.
2. Purchase external tax engine – besides high purchase and maintenance costs as external interface have to be used for certain clients it is in conflict with own IT policy as use of standard SAP is preferred
3. Renaming of tax codes exercise (SLO projects) – downside is that in the future due to global VAT change increases a company will face shortages again

How can above downsides be avoided?

Taxmarc™ has developed – an integrated SAP solution that uses a time stamped rates for tax codes. As a result the tax code structure will always remain the same. The advantage is that SAP tax codes structure does no longer require changes and that maintenance costs and involvement of IT is reduced significantly.

Business case

A single VAT rate change could take (set up, transports across the SAP landscape and test cycles prior to production) about 200 – 300 hours. After implementation this is reduced to 2-3 hours and in order to calculate hard savings the surplus has to be multiplied by the amount of VAT rate changes expected.

How long does this process take within your organization and what will be the amount of annual saving (i.e. Return on Investment period)?

Proven solution: all our Taxmarc™ solutions are ‘implemented’, ‘tested’ and ‘in production’ for many years. This product have been implemented by several listed multinationals and are our client reference for Q&A. One customer has an annual revenue of approximately $36 billion and operations in more than 80 countries.

The solution also covers the important iDoc processes within this type of business with many intercompany transactions.