Unique Tax Codes Depletion

[minschwartz]

Tax codes are created in SAP through the use of 2 alphanumeric characters. With 26 alphabet letters and 10 numbers (0-9), this provides a maximum of (36 X 36) 1296 unique tax codes that can be created.

Due to the size and complexity of our organisation, we are finding that we are coming close to running out of unique naming for the creation of new tax codes.

Has anyone encountered the same problems or has in the past and what was done to resolve it?

SAP has indicated that there is no plan to extend the current 2 characters field so we need to explore alternative solutions.

[vinod_vemuru2 · Accepted solution]

Hello,

One possibility is to recycle unused tax codes. It is not necessary that all tax codes in the system would have been used by business. Old, unused tax codes can be recycled.

Also, If same account keys and Tax G/Ls are used for more than one country, same tax code can be used in multiple countries (Even though tax percentage is different).

I have explained the details in below blog. Please check if it helps.

http://scn.sap.com/community/erp/financials/blog/2013/10/03/tax-code-recycling--the-best-way-to-limi...

Thanks,

V V

[minschwartz]

Unfortunately, our design for tax codes allocate a unique tax code for each specific country tax decision.

The design means the same code can never be re-used for a different purpose in different jurisdictions.

Because of this design, this means that the maximum of 1296 across the client rather than by each tax procedure.

[vinod_vemuru2]

Hello,

Did you already carried TAANA analysis to find free tax codes? If a tax code was never used for many years, there would be high possibility that it wouldn't be used in future too. Such kind of tax codes can be recycled to other countries.

Can you explain little bit more about the setup in your system. Usually, same tax G/L is used for a given tax condition in different countries.

Thanks,

V V

[minschwartz]

Hi Vinod,

The design for our tax code account determination is 1 GL account for all input tax codes per country and 1 GL account for all output tax codes per country.

This does leave us in a bit of a predicament.

We are considering the use of special characters in the naming convention but that comes with its own challenges.

[vinod_vemuru2]

Hello,

If G/L account is different in different countries, then we are left with only recycling option.

Do TAANA analysis. I am sure you will definitely find many unused tax codes. Update forum if there is any other better solution found.

This issue is quite interesting

Thanks,

V V

[minschwartz]

Thanks, Vinod.

Recycling of tax codes would be an option along with the use of special characters.

At the same time, we are also considering the use of a tax engine application.

[vinod_vemuru2]

Hi,

Just another idea if your client is ready to invest. You can use external tax applications like SABRIX, Taxware etc. In this case, total number of SAP tax codes would be in 10s.

Thanks,

Vinod.

[minschwartz]

Thanks, Vinod.

We are certainly evaluating those applications along with Thomson Reuters OneSource.

Do you have much knowledge and experience of those applications that you can share?

[vinod_vemuru2]

Hi,

I worked on SABRIX for about 3 months. We used to have lot of issues in old versions. It seems the new version is quite stable now.

Couple of bullet points about the solution.

1. SABRIX is integrated to SAP via RFC.

2. Very few SAP tax codes are used in SAP.

3. Tax reporting is an additional and effective feature available in SABRIX.

4. Exchange rates are to be maintained manually

5. Any legal changes are automatically taken care by SABRIX via patch updates.

6. Tax rate changes are also automatically updated via patches along with validity dates. So, past dated posting are taken care with correct tax percentage.

Please let me know if you need more information.

Thanks,

V V

[minschwartz]

Thanks, Vinod.

I believe that Sabrix is now part of Thomson Reuters and the product has been renamed as OneSource.

It does sound like the solution we need and would resolve the issue we have with the depletion of unique tax codes due to our design for account determination as well.

Was your client on the project based in the UK?

Min

[vinod_vemuru2]

Hi,

Yes. Now it is with Thomson Reuters. Our client has global presence and SABRIX works fine for all countries.

Thanks,

V V

[former_member183378]

Hello Schwartz,

That maximum limit of unique tax codes of 1296 is per country. For one country we cant create more than 1296 tax codes.

Seems not possible to extend the currenct characters field in FTXP.

Thanks & Regards,

Lakshmi S

[Former Member]

probably i am missing something in your question....your are right about the maximum number of tax codes, but this is per country (it means, one tax code can be used for several countries/tax procedures).

[AlterEgo]

Well your statement is incomplete because....

[AlterEgo]

Sorry I hit enter and posted the answer without been finished. I tough I would open more the answer field :(. Is incomplete because is true BUT if you need to post the same tax code in a different country for a different GL account, that will NOT be possible. So same tax code assign to different country/Tax Procedure is a possible solution JUST if there is no need to post to a different account.ry