How to adjust the tax amount for Japanese yen sales orders

[omega-ou]

Hi,

The company is in japan , the tax rate for domestic sales orders in Japan is 10% .

Meanwhile, the Japanese yen currency does not have a decimal point.

For example, when we create a sales order with a net value of 115 and the system calculates a sales tax of 12, but the actual tax amount is 11, how can we adjust the tax amount?

[pawan__kumar]

Check the Rounding Rule setting. Change it to "D" (round down) or equivalent to truncate fractions. If "D" is not available, use "X" but with a custom routine or check for Japan-specific settings.

[Chris1973]

Hi @omega-ou 

Thank you for your question. Let me walk you through it.

Japanese Yen does not have decimal places in SAP, so all calculations round to the nearest whole number. The calculation of tax such as 10% VAT may lead to fractional values, which SAP standardly rounds either up, down, or standard based on the system and tax code configuration. This sometimes causes discrepancies between the legally expected tax per Japanese tax requirements and the system calculated value.

I advice you consider doing the following:

1. Tax rounding in SAP for Japanese scenarios can be controlled through specific routines and VAT code settings. In the SAP configuration, you can select rounding rules for each VAT code: standard (round to nearest), round up, or round down. These settings are typically found in the tax code using transaction OBYZ or VAT customization, depending on release and localization settings.
2. Make sure you use routines like 16 and 17 (In case you want to discount condition type, you need to give Routine 16 in the Alt. Cal. Type and also add Routine 17 in your Pricing Procedure) to influence rounding, which is available in pricing procedure configuration (V/08). For JPY, the system should use these routines to match rounding at the whole yen.
3. You can configure decimals for JPY in table TCURX or via transaction OY04 for currency decimals (For this go to T.Code oy04, select the currency JPY and maintain the required decimals there). For Japan, you should set the decimal to 0, and all values should be rounded by SAP accordingly.
4. Finally, you do have the possibility to manually override the rule. If strict legal compliance is required and discrepancies persist, SAP typically expects the system settings to reflect required rounding. Manual tax adjustment lines or post-processing adjustments may be required for occasional exceptions, though note that this is less common and less automated.

Below reference provide further details.

Rounding control in system setting (table TCURX/OY04)

I hope this provides the desired insights.

"GenAI was used to help generate this content"

Best regards

Chris

[kavya11]

@Chris1973 According to our Rules of Engagement, I have added the " GenAI was used to help generate this content " statement to your answer, as the content has been AI-generated. Transparency is key when it comes to AI, we therefore require that AI-generated content is marked as such: "If you want to publish content that was helped/created by GenAI, you must add the user tag GenAI Assisted Content. For content where it's not possible to add a user tag (e.g., answers), you must include this statement: "GenAI was used to help generate this content." Thank you!