2503331 - Functionality Foreign Input Tax Deduction is not Available in SAP ByDesign and CfTE

You have the following setup in your system:

The company has its main residence in country A (e.g. Germany).
Employee  ABC ( ABC stands for the employee ID) belongs to a subsidiary in country B  (e.g.Belgium).
The main company is registered with a tax authority in country A.
The subsidiary is registered with a tax authority in country B.
Employee ABC from country B travels to country A and gets an invoice with the advance tax refund.

You have the following expectations:

Because the main company is located in Germany you expect that the tax country for these expenses is Germany and the available Tax-code is Domestic purchase of goods, standard rate, fully deductible.

KBA , SRD-FIN-ERM , Travel and Expense Management , How To