Determining and Calculating Excise Tax in SAP

Is your company preparing to configure your SAP to handle excise tax calculation? Are your IT and tax teams in the middle of a costly custom build?

No doubt you're facing a number of challenges.

Even when a vendor claims flexibility to handle any tax type, the reality is that the level of customization required to calculate excise taxes in SAP typically leads to lengthy implementations and time-consuming maintenance.

Perhaps, you were unaware the system would be rendered incapable of meeting the dynamic requirements of numerous taxing jurisdictions where tax laws change constantly. Or maybe, you recognized the gaps but determined you had the manpower and resources to build a custom module capable of handling the extra data. Whatever the reason, customizing a sales and use tax-friendly solution to handle excise tax is bound to become a long, relentless undertaking.

No matter what stage of this process your company is in, it's important to be aware of the extra costs and associated risks that often lurk in the corners of a custom build. These risks can not only drain resources but also increase audit liabilities, particularly in the highly regulated oil and gas industry.

In this blog series, we'll look at:

• The critical building blocks of a custom SAP excise tax module
• Common pitfalls—and how to avoid them
• The most overlooked components of ongoing maintenance
• Anticipating and accounting for complications in the highly complex fuel industry

Whether you're just starting a new implementation or are currently living through the headaches of monthly maintenance, these are all critically important considerations to address. All it takes is one small oversight to increase liabilities and turn a smooth, seamless audit into a costly assessment.

To ensure we address the most significant risks and hidden costs of custom builds for SAP, this series will focus primarily on fuel excise taxes. However, companies in other industries including tobacco wholesale and heavy equipment rentals will also benefit from upcoming information and insights.

If managing the indirect tax burden in SAP has you feeling overwhelmed, you're not alone. Even the most experienced fuel retailers struggle with excise tax determination and compliance. In our next post, we'll begin to untangle some of the biggest risks associated with custom excise tax builds. I recommend subscribing to the excise blog today so you'll be notified.