Ariba is a procurement tool widely used for indirect purchases. OneSource tax engine will be responsible for calculating indirect taxes and integrated into Ariba Solution.
The tax calculation triggered in Ariba during the creation of Purchase Requisition (PR) & Invoice Reconciliation (IR). Purchase Order (PO) documents created from PR will not be subject to a new tax calculation and inherit the taxes in the PR. After posting of Goods Receipt (GR) or Service Entry Sheet (SES) vendor adds the tax amount and tax type in Ariba supplier network (ASN) then Invoice document is created in ASN and replicated to Ariba P2P after replication tax engine call triggered from Ariba P2P and it finally creates the IR document.
There are three configuration steps required to establish a connection to an external tax engine from Ariba.
- Ariba Configuration
- OGT Configuration
- OneSource Configuration
A tax call has been made to OITD via OGT (OneSource Global Tax) interface. During the PR process, the user can initiate the tax call simply clicking on the “Update Taxes” button. Ariba initiates the tax call and transmits document level information to the OneSource tax engine via the OGT interface. OGT sends the response back to SAP Ariba with tax information including tax authorities applicable, tax types applicable, the tax rate applicable and tax amount calculated. SAP Ariba solution would update the tax information on the requisition document being processed. This whole tax call request and the response would occur in real-time, seamlessly. Tax engine response would be updated on requisition line items, Taxes column showed the tax amount calculated on PR. During the Invoice Reconciliation process, SAP Ariba makes a tax call and exports information on Vendor Invoice. OneSource would perform tax calculation and responds back with the expected tax rate, amount, tax authorities, the tax types and the tax code which is updated on Invoice Reconciliation line items via OGT interface. once Invoice is reconciled and approved, the “OK-To Pay” file will be exported to SAP ECC for payment processing.
Ariba Configuration for external tax engine
Export Document Data for External Tax Calculation
Go to Ariba Core administrator > Integration Manager > End Point Configuration
Create new end point configuration
HTTP Authentication user id & password will be provided by the OneSource Tax team and same needs to be maintained in OITD as a system user
Next step would be enabling the integration task
Navigate to Manage > Core Administrator > Integration Manager > click on Integration Configuration
The format should be web service
Endpoint configuration name
The system would display the integration task Export Document Data for External Tax Calculation
Enable the web service configuration
There are a few CSV files that need to be imported in Ariba solution to calculate the taxes correctly.
For example >> to enable the tax call for each company code following CSV format is needed.
File name >>TaxCalculationProviderExport.csv
Field APPROVABLENAME can have two values ariba.purchasing.core.Requisition for Purchase Requisition and ariba.invoicing.core.InvoiceReconciliation for Invoice Reconciliation document. These two entries are enabled the tax call for both the processes (PR and IR)
File Name >> TaxTypeExport.csv
File Name >>TaxTypeMapExport.csv (Tax type mapping)
File Name >>TaxType.csv (Defines tax types to be associated with the tax line items)
Category 2 defines “Sales Tax”
File Name >> TaxComponent.csv
This is mainly required if ECC system calculating taxes on SAP Native
File Name >>TaxCodeHeader.csv (All the ECC tax codes should be imported)
File Name >>TaxCodeDetails.csv
In VAT countries, VAT tax triggered based on Seller or vendor registration number.
All the supplier VAT registration numbers should be maintained under SupplierTaxRegistration.csv file (Supplier #, VAT reg #, and Country)
All the buyer/company registration number should be maintained under ComapnyCodeTaxRegistration.csv (Company Code, country, reg #)
Data Import process
Site Manager > Data Import/Export or Core administrator >Integration Manager >Data Import/Export
Select the task name “Tax” and click on Search; All the tax-relevant tasks will be available.
Import the CSV file one after another in a proper format; at the check the status of these files
Custom field Assignment in Ariba
If the business would like to send some additional values from Ariba to OITD then custom field assignment is needed. SAP Ariba customer support team generally does the assignment. Generally, data comes from Ariba to tax engine in the following format, then attribute assignment has been done in OGT.
M [ Item category example]
INVOICE RECONCILIATION – TAX VARIANCE AND EXCEPTION HANDLING
- Under-Tax variance exception:
When supplier charged tax, the amount is less than the engine calculated tax amount, it results in under tax variance.
- Over-Tax variance exception:
When the Supplier charged tax, the amount is greater than the engine calculated tax amount, it would result in overtax variance exception.
- Tax Calculation Failed exception:
When a supplier chooses a wrong tax type, it is causing an issue. For example, if the supplier chooses tax type “GST” for country GB (VAT), then Ariba throws an exception.
Tax tolerance in Ariba set up at line level
Use Tax calculation for the US
If the supplier did not charge any taxes, then use tax will be applied in the US. In the Ariba supplier network, the supplier should not add any tax lines, then during the data transfer, the OGT interface automatically converts the company role from Seller to Buyer to calculate consumer use tax.