SAP Knowledge Base Article - Public

2564184 - Custom Tax Code not Selected in Sales Orders


You have created a Tax Code for a Tax Event in the Business Configuration Fine Tune settings but this Tax Code is not determined by the Automatic Tax Determination in Sales Orders.


SAP Business ByDesign

Reproducing the Issue

  1. Open the Business Configuration work center.
  2. Find and Open the Tax on Goods and Services Activity.
  3. Open Define Tax Codes.
  4. Create a new Tax Code ABC for Tax Event XYZ. (ABC represents the Tax Code ID, XYZ represents the Tax Event ID)

When you create a new sales order and a product is selected for the respective tax event, the standard tax code is selected and not Tax Code ABC.


You have not set the standard Tax Code to be invalid. So it is still considered for the Automatic Tax Determination. If there are multiple Tax Codes for a single Tax Event, the system uses the following logic to determine the Tax Code:

  • The Decision tree will determine the relevant Tax Event for the transaction involved.
  • For each Tax Event, you can maintain multiple Tax Codes in the system in the Tax on Goods and Services Activity.
  • If only one Tax Code is mapped to a Tax Event it is automatically derived in the Sales Order.
  • If multiple Tax Codes are mapped to a Tax Event, system picks the appropropriate one by checking the Tax Rate Type Code and Deductibility Code maintained. A more specific tax code takes preference, e.g. with maintained Tax Rate Type or Deductibility Code.
  • If there are multiple Tax Codes maintained with the same set up for one single Tax Event with the same details, as Tax Rate Type and Deductibility Code, the earliest maintained Tax Code is selected.

In the described issue, Tax Code ABC has the same setup as the standard Tax Code from SAP. Thus, the system selects the standard Tax Code, as it was maintained earlier than the custom Tax Code.

Note: Using Tax Deductibility is only supported for Purchasing scenarios. Setting up Sales Tax Codes with Tax Deducibility will result in them not being determined.


Change the validity setting for the standard Tax Code, so that only one Tax Code is valid with the same settings for one Tax Event.

  1. Open the Business Configuration work center.
  2. Find and Open Tax on Goods and Services Activity.
  3. Open Define Tax Codes.
  4. Find the Standard Tax Code for Tax Event XYZ that you try to replace and change the Valid To Date to the current date.

Now, there will be only one valid Tax Code for this particular Tax Event for the Automatic Tax Determination in Sales Orders.


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