Deferred taxes Deferred taxes) refer to deferred tax liabilities or tax assets that arise from differences between the determination of profits under commercial law and tax law. These do not become effective for tax purposes immediately when they arise, but only at a later date.
In SAP Business One, deferred taxes are tax amounts that are recognised as part of transactions but not realised until a later date. The function is used in particular for correct accounting and tax deferral.
Function in SAP Business One
The management of deferred taxes in SAP Business One depends on the localisation used. Not all country versions of the system support this function. In the localisations for Finland, Norway, Panama, Sweden and the Netherlands is the function not available.
Deferred taxes are particularly relevant in the following countries:
- Costa Rica
- France
- Guatemala
- Italy
- Mexico
- South Africa
- Spain
Special technical features
From SAP Business One Version 2007 A SP01 In supported localisations, it is possible to change the Processing of exchange rate differences to be capitalised for deferred taxes. Important note: After the first processing of corresponding transactions, this function can be no longer deactivated can be used. It is standard for new or existing companies not activated.
Related control functions
Deferred taxes are related to a variety of other tax functions in SAP Business One, including
- tax codeBasis for calculating sales tax, independent of G/L accounts.
- Tax ratesCustomisable via tax rate history per tax code.
- Tax accountsInput tax and sales tax accounts are defined per tax code.
- Reverse charge procedureMapping the reverse charge mechanism for intra-Community supplies.
- Mandatory information on invoicesSpecific text fields for compliance with tax regulations.
- withholding taxDifferent characteristics with country-specific activation.
- Tax reportsDetailed reports to support the tax return.
- Automatic sales tax in journal entriesSystem support for correct tax accounting.
Instructions for use
The configuration and utilisation of deferred taxes and related functions should be carried out in close consultation with a tax advisor. Incorrect settings can have significant accounting and tax consequences.
Frequently asked questions (FAQ)
What are deferred taxes?
Deferred taxes are tax amounts that are not due immediately but will be recognised at a later date due to differences between the determination of profit under commercial and tax law.
In which countries does SAP Business One support deferred taxes?
This function is available, for example, in Costa Rica, France, Guatemala, Italy, Mexico, South Africa and Spain, but not in Finland, Norway, Panama, Sweden and the Netherlands.
Can the exchange rate difference processing for deferred taxes be reversed?
No. Once activated and used after the first transaction, this function can no longer be deactivated.
How are deferred taxes technically integrated in SAP Business One?
They are part of the extended tax functions and can be activated in supported localisations via the tax code management and exchange rate functions.
Why is a tax advisor recommended for the set-up?
The correct configuration of tax codes, tax accounts and reporting functions is complex and requires tax law expertise.
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