1834512 - The Tax Code for Tax Exemption is not Selected Correctly in your Sales Document

The tax code for tax exemption is not selected correctly in your sales document.

SAP Business ByDesign

pre-requisite : You have created the sales quotes XYZ (XYZ represents the identification of a sales quote), the Account/Buyer ABC (ABC represents the identification of your account) is located in Austria. The Seller party is located in Germany and the Ship-from party is also located in Germany.

In the account master data, you have maintained a Tax Exemption as follow :

1. Go to the Account management work center.
2. Go to the Account view.
3. Select the account ABC.
4. Go to the Financial Tab.
5. Select the Taxes sub tab.
6. Go to the Tax Exemption.

Country AT- Tax Exemption reason : 1 - Tax exemption for sale

Steps to reproduce the issue :

1. Go to the New Business work center.
2. Go to the Sales Quote view.
3. Select the Sales Quote XYZ.
4. Go to the Items Tab.
5. Select Item 10 > Tax Sub-tab.

You can see that the Tax Country is Germany, the tax code 501 - Domestic Supply (Standard Rate) and no tax exemption were applied.

In a Sales Document where the Ship-from party is Germany and the Ship-to party is Austria (or any other country in EU); the tax country will be defaults to DE - Germany. In order to have a tax exemption, you should create a tax exemption for the country Germany in the account master data.

1. Go to the Account management work center.
2. Go to the Account view.
3. Select the account ABC.
4. Go to the Financial Tab.
5. Select the Taxes sub tab.
6. Go to the Tax Exemption.

Choose the country of the Ship-from party (DE-Germany in our example) and one of the following tax exemption :  7 - Tax Exempt According to §4, Nr. 7 UStG or 1 - Tax Exempt According to §4, 2 - 6 UStG. Once you have save your account master data the correct tax code should be triggered in your sales document with account ABC (e.g 513 - Exempt According to §4, Nr. 7 UStG if you have maintained Tax Exemption : 7 - Tax Exempt According to §4, Nr. 7 UStG).

TAX Code, Tax Country; EU , KBA , AP-SLO , Sales Order Processing , How To