2190622 - Tax Exemption Code of Product For Specific Region Not Considered In Sales Document

You have maintained tax exemption reason 5 - Tax Exempt According to §4, 8 - 28 UStG for a specific region in the master data of a product, e.g. service XYZ (XYZ represents the service ID). Therefore you expect that when selecting service XYZ in sales documents, such as Sales Quotes or Sales Orders, the tax code 510 - Exempt According to §4, 8 - 28 UStG shall be applied automatically.

Instead, the standard tax rate was determined.

SAP Business ByDesign

To maintain the Tax Eemption reason:

1. In the Product and Service Portfolio workcenter navigate to the Services view and find service XYZ.
2. Press Edit and then View All.
3. Navigate to the Taxes tab.
4. Press Add Row.
5. Maintain the Country, e.g. Germany.
6. Maintain region ABC (ABC represents the region name) in the Region column.
7. Maintan Tax Type 1-Value Added Tax and Tax Rate Type 3-Zero.
8. Finally, enter the Tax Exemption Reason 5 - Tax Exempt According to §4, 8 - 28 UStG.
9. Press Save, then Close.

Now create a sales document, e.g. a New Sales Quote:

1. In the New Business workcenter go to the Common Tasks and select New Sales Quote.
2. Select account DEF (DEF represents the Account ID) and enter all the mandatory data.
3. In the Items tab select service XYZ.
4. Open the Taxes sub-tab.
5. You notice that the standard tax rate has been determined instead of the tax exemption rate.

You have specified region ABC for the tax exemption reason. In the case the system checks the addresses of all the involved parties. If there is a deviation where region ABC is not maintained then the system automatically selects the standard tax rate.

If, for example, the State GHI (GHI represents the state name) is not maintained in the Main Address of account DEF then the system will determine the standard tax rate.

1. In the sales document, here the sales quote, navigate to the Involved Parties tab.
2. Highlight the Account row.
3. In the Party Details sub-tab check if the State GHI is maintained in the Address section.
4. Then highlight the Seller row and also check the State here.
5. If the region ABC is missing for any of them you need to add them in order to have the tax exemption reason and therefore the respective tax code applied in the sales document.

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