2096321 - How to Set the Deductibility Type for Some Transactions

You observed that the Deductibility Type derived in some transactions is not as expected and you would like to use the Deductibility Type derived other than default in the system. For e.g. The Default Deductibility Type determined is Fully Deductible, but you would like to Set the Deductibility as Partial or Non-Deductibility for some Transactions. 

1. Go to Supplier Invoicing work center.
2. Select Invoice Entry view.
3. Select the Purchase order and select the New Invoice button.
4. Now you see that the Deductibility Type determined is not as expected.

There would be a pre-delivered set for Tax Deductibility type for the each Country. Then there can be two types of Tax Codes can be present in the system.

1.  The Tax Codes without the Deductibility Type –System will derive the Default Deductibility set at the country level for such Tax Codes.
2.  The Tax Codes with the Deductibility Type – System will use the Deductibility Type configured in the Tax Code.

If the Default Deductibility Type defined for country is Fully Deductible in the Tax settings for Purchasing Activity. All the tax codes defined for Country either don’t have any Deductibility Type or are Fully Deductible. Then all the tax codes determined will be Fully Deductible.

There are 2 possible solution here.

1. If a deductibility type other than the default (Fully Deductibility) is required, the user has to change the Tax Code in the document manually to the tax code that contains the relevant deductibility type. If we don't have any tax codes for Country with the desired Deductibility type , then this solution will not work.
2. Let the system determine the tax code with the Fully Deductibility. Then you can change the Deductibility Type manually to the Desired Deductibility Type for the relevant  transactions.

It is indeed defined by law that in some cases taxes may only be partially deducted or Non-Deductible as opposed to the Default Deductibility configured at the country level, It is not necessary that specific tax codes have to be defined in By Design for this purpose .Hence, the second solution can be followed if there are not Tax Codes delivered with the desired Deductibility Type.

Note: You should not change the Default Deductibility Type defined at the country level, as this will affect all transactions or the Tax Code Determination will be failed.

You may refer to the Case Document 1943133 - Tax code is not selected automatically for Free-Text Service Item in the Supplier Invoice

KBA , deductibility type , AP-ACC , Business ByDesign: Financial Accounting , How To

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