1986587 - Error Message: Non deductible taxes Are not allowed for down payment requests

While selecting a Non Deductible Tax Code or a half Deductible Tax Code for a Down Payment Request you get the Error as Non deductible taxes are not allowed for down payment requests.

SAP Business ByDesign

1. Go to the Supplier Invoicing work center.
2. Select New Down payment Request.
3. Click on the required Supplier.
4. Click on View All.
5. Navigate to Items tab.
6. Fill in the required information such as: Product ID, Description, Tax Code etc.
7. Choose tax code- 71 - Dom. Purchase-Services (ST), 78 - Purch with Serv Tax (Reduced Rate) or 150 - Acquisition of Service (Reverse Charge)

You then get an Error Message: Non deductible taxes are not allowed for down payment requests.

In the SAP Business ByDesign system, you cannot use the Non Deductibility for a Tax during Down Payment Request. 

The reason for that is when a Company creates a Down Payment for a supplier, the Tax Amounts should be fully deductible so that once the Taxes are reported in the Supplier Invoices the Company can claim the credit against the Taxes reported in the Down Payment.

If the Tax Code in the Down Payment are non-deductible or half deductible, those Taxes in the Down Payment will be considered as expense for the Company and then they can never claim that money back.

Non Deductibility can be applied during the Invoice, and the effect is that the credit gets added to the material and you can check the same in the Journal Entry created without a Tax line.

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