Navigating Compliance with SAP IS-Oil TDP: Managing Tariffs, Duties, and Permits Effectively

In the oil and gas industry, compliance and cost control often go hand-in-hand. One of the critical aspects that companies face is handling tariffs, duties, and permits (TDP) efficiently across global operations. Even minor errors in duty calculation or reporting can lead to regulatory penalties, financial leakage, and operational delays. This is where SAP IS-Oil TDP (Tariffs, Duties, and Permits) becomes a game-changer, enabling organizations to simplify excise duty management and strengthen compliance.

Why TDP Matters in Oil & Gas

Oil and gas supply chains span across multiple regions, each governed by unique taxation rules, duty rates, and regulatory frameworks. Whether it is moving crude oil across regions, handling refined products, or managing imports and exports, businesses must calculate and account for excise duties accurately.

The TDP component in SAP IS-Oil is designed to address these challenges by automating excise duty calculations and integrating them seamlessly with purchasing, sales, production, and inventory processes.

Key Capabilities of SAP IS-Oil TDP

1. Excise Duty in Purchasing and Sales
   TDP ensures that duty calculations are built into every purchase and sales transaction. This minimizes the risk of underpayment or overpayment, keeping financial processes accurate and auditable.
2. Inventory and Goods Movement Compliance
   When materials move between plants or warehouses in different regions, excise duty rates can vary. TDP automatically calculates and posts excise duties during such movements, ensuring compliance without manual intervention.
3. Production Order Integration
   In production environments, excise duty is calculated for dutiable materials consumed or produced. TDP embeds compliance directly into production orders, avoiding costly after-the-fact adjustments.
4. Duty Liability and Claim Management
   TDP records both liabilities and claims linked to excise duty, providing a clear audit trail. This helps in efficient reconciliation with tax authorities and reduces disputes.
5. Split Inventory Management
   Businesses can manage the excise duty portion separately from the net price of materials. This provides a more transparent view of inventory valuation and ensures compliance with accounting standards.
6. Multiple Duty Rates and Revaluation
   With dynamic changes in excise duty policies, TDP allows multiple duty rates for the same material. It also supports inventory revaluation after rate changes, keeping financial reporting precise.
7. Licensing, Exemptions, and Reductions
   TDP manages licenses that provide excise duty exemptions or reductions, ensuring businesses maximize benefits where eligible while staying compliant.
8. Region-Based Calculations and Reporting
   Since duty regulations differ from region to region, TDP applies regional rules automatically and consolidates data into structured reports for easier compliance tracking.

Strategic Benefits for Oil & Gas Companies

• Cost Efficiency: Eliminates manual errors and prevents duty overpayments.
• Regulatory Compliance: Reduces risks of penalties by ensuring accurate, timely postings.
• Transparency: Enhances visibility into excise duty liabilities and exemptions.
• Agility: Quickly adapts to changing excise duty rates and policies.
• Decision Support: Provides a reliable data pool for reporting and audits.

Why It Matters Now

With global energy markets becoming more regulated and scrutinized, companies need robust tools to manage tax and compliance obligations without slowing down operations. SAP IS-Oil TDP provides that balance—supporting compliance while enabling operational efficiency.