Streamlining Tax Management with Microsoft Dynamics 365 Finance and Supply Chain Management’s Universal Tax Rate API

In this blog we will discuss Microsoft Dynamics 365 Finance and Supply Chain Management’s Universal Tax Rate API and how it will help your company deal with taxes and manage varied tax rates. The universal tax rate API in Microsoft Dynamics 365 is designed to simplify the complicated process of tax management for businesses everywhere and integrate with third-party tax solutions (i.e. Vertex and Avalara).

Overcoming Tax Calculation Hurdles

Microsoft Dynamics 365 Finance (D365) offers adaptable tools for tax determination and calculation. Businesses can now set up and adjust tax rates and rules to accommodate tax scenarios within D365. This feature is crucial in countries with complex and changing tax laws. Global businesses must accurately manage tax rates and rules for each location to stay compliant.  Relying on manual processes for this task has led to mistakes, putting companies at risk of legal issues, fines, and harm to their reputation.

These obstacles make numerous companies turn to third-party tax solutions for a more automated approach to tax calculations. Integrating these solutions with D365, however, presented its own set of challenges, often requiring a deep understanding of the ERP systems’ data models and maintenance.

The Power of the Universal Tax Rate API

The Universal Tax Rate API offers a solution to these challenges by serving as a standard channel for data exchange between D365 applications and third-party tax services. It simplifies the integration process, cutting down on the need for complex customizations and making it easier to manage.

Benefits 

This API brings numerous benefits to D365 users by enabling easier integration with third-party tax solutions and alleviating the headaches associated with tax rate and rule management. By leveraging the universal tax rate API, businesses can achieve:

• Ease of Integration: Connect effortlessly with supported third-party tax solutions. This avoids costly customizations.
• Uniform Communication: Employ a set of predefined APIs for various tax-related operations, such as address validation and tax calculation, all formatted in JSON for efficient data exchange.
• Improved Compliance and Efficiency: Ensure your tax calculations remain accurate and up-to-date. This reduces compliance risks and enhancing operational efficiency.
• Extensive Coverage within Dynamics 365: Benefit from the comprehensive handling of tax transactions across Dynamics 365 Finance and Supply Chain Management applications, with future expansions anticipated.

Implementation

Using the API is easy. Upon the creation or update of a transaction, the system identifies those configured for external tax calculation, sends a data payload to the selected tax solution provider via the API, and then integrates the calculated tax back into the D365 system for final validation and recording.

In embracing the universal tax rate API, businesses can revolutionize their tax calculation processes, focusing on compliance, efficiency, and scalability within the Dynamics 365 Finance and Supply Chain Management ecosystem.