What is double tax agreement in SAP SRD-HR-PAY - HCM-Payroll Processing?

SAP Term: double tax agreement

• Component: SRD-HR-PAY

• Component Name: HCM-Payroll Processing

• Description: An agreement between countries which prevents a person paying double tax when they are sent to a foreign country to work for a restricted amount of time.

Smart SAP Assistant

• Key Concepts: 
  Double Tax Agreement (DTA) is an agreement between two countries to avoid double taxation of income earned in either country. It is a way for countries to agree on how to divide the tax revenue from income earned in both countries. The agreement also sets out the rules for determining which country has the right to tax the income. 
  
  How to use it: 
  In SAP, DTA is used in the HCM-Payroll Processing component of SRD-HR-PAY. It is used to determine the tax rate applicable to an employee’s income based on their country of residence and the country where they are employed. The DTA also determines which country has the right to tax the income and how much of the income should be taxed by each country. 
  
  Tips & Tricks: 
  When setting up a DTA in SAP, it is important to ensure that all relevant information is included in the agreement. This includes details such as the applicable tax rates, which country has the right to tax the income, and any other relevant information. 
  
  Related Information: 
  For more information on double tax agreements, please refer to the SAP Help Portal or contact your local SAP representative.