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External tax calculation - US

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Hello all, I'm trying to figure out a solution for recording US tax data in sales orders.

The scenario is as follows. The sales order will be created in the e-commerce system. E-commerce will be integrated with Vertex. Vertex will provide tax jurisdiction code, rate and amount at the time of order creation. Sales order data along with the tax data then needs to be interfaced to SAP from E-commerce (one time customers will be used). Tax reporting will be produced from SAP. As you can see SAP will not be integrated with Vertex. It will just receive sales order and tax data from E-commerce system.

I don't have much experience with SD and Taxes so I'd appreciate any help.

How can I record tax jurisdiction code that I get from E-commerce in sales order/one time customer? It only allows entering the values previously maintained in config but we're not planning to create thousands of jurisdiction codes in SAP.

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Answers (2)

Jelena
Active Contributor
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Since this is an SD question it would make more sense to ask in the SD forum instead.

Naturally, you can't enter a jurisdiction code in the sales order if it is not a valid value in SAP. I'm not really sure why it's a wide spread belief that somehow through an interface it could be possible to do more than is allowed in an SAP transaction. It's only possible to do the same actions as in VA01 or even less sometimes.

This is just from the technical perspective, maybe the SD experts can advise further. Good question about the billing, you really need to think through the whole cycle.

P.S. Actually this is a rather odd setup, why not integrate SAP with Vertex if you're paying for it anyway?

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Hi Jelena,

Please see my reply above. But basically Vertex is integrated to e-commerce system because that's where the order is calculated and we need to know the exact tax amount at that time. Only after it's fully approved in e-commerce the order is interfaced to SAP where it will be billed.

Thanks,

Kirill

Jelena
Active Contributor
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The short answer to your question - it's not possible to enter tax jurisdiction from the web site (or anywhere for that matter) that does not exist in SAP. I'm not an SD expert, but I guess you could simply make the tax conditions manual and then pass the tax amount from the website, but this can easily backfire. There is a reason why in SAP the copy control is usually set to redetermine taxes when billing.

I'd take this back to the business and point out that the process wasn't really thought through. The best solution would be to simply integrate SAP with Vertex (or another tax application, they have competitors too) and be done with it.

When you have a website where the customers could order from any jurisdiction out there then it won't be feasible to keep up with the list in SAP. The manual process is sustainable only when you have a very limited customer base.

AntonFarenyk
Contributor
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Technically – even proof of feasibility of such non-integrated process is barely attainable IMHO. Let’s imagine blue-sky: Instead of using integrated and proven tax procedure TAXUSX and having ERP interfacing with Vertex through standard RFC…Well you probably still need external tax calculation activated in ERP to avoid maintaining jur codes in ERP. You need custom RFC to e-commerce to populate interface TAXDOC00 in the same way RFC_CALCULATE_TAXES1 does. You need custom (Zxxxxx) tax procedure with requirement(s) ABAPed in a way that conditions for 6 levels of possible taxes in US are picked from e-commerce system. Your tax jur code will need to be brought from e-commerce in the same way that RFC_DETERMINE_JURISDICTION does. You will need to break the link between new Z tax procedure and external tax system if copied from i.e. TAXUSX. Hope that reporting will pick everything up as expected. And then imagine thunderstorm - returns, credits etc.

I may overlook or not know something but it appears that simply integrate and have tax jur code and amounts coming from Vertex is WAY easier. Key point to me is that tax reporting will be done from SAP. This is not an easy way mostly because if you do business in multiple jurisdictions (read: states) it is much simpler to do your US tax reports in Vertex/Sabrix/Taxware than from SAP. There may be  exceptions but still.

I could not agree more with Jelena and would suggest having both e-commerce and ERP integrated with Vertex.

AntonFarenyk
Contributor
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Hi Kirill,

Tax jur code could be stored in the order with one-time.

Part of story is missing to me here. Tax reporting is US out of SAP is usually based on invoices issued from SAP. Which system will bill the customer? If SAP then some integration with Vertex is still required.

regards,

Anton

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Hi Anton,

That's correct, invoices will be issued from SAP. However initially the sales order will be created in e-commerce and the complete quote including tax amounts will need to be provided to customer. At this time e-commerce will call Vertex to get those tax amounts and jurisdiction code.

Once the sales order is approved in e-commerce, it's sent to SAP where billing is performed. The idea is to transfer tax data from e-commerce to SAP at this point. Hence the challenge here is to capture the jurisdiction code in the corresponding field. The system wouldn't allow it since it's not just a text field and the jurisdiction codes haven't been maintained in SAP.

I understand it's not the ideal scenario and I would prefer to integrate SAP with Vertex directly. However, since sales order is calculated in e-commerce initially, it makes sense for this system to integrate with Vertex.

Thanks,

Kirill