SAP Knowledge Base Article - Public

2774426 - Exemption related Tax code is not determined in Purchase order or Supplier invoice

Symptom

Tax exemption though maintained in Product master data, system is not considering it while determining tax code in the Purchase order, hence you see wrong tax code in purchase order.

Environment

SAP Business ByDesign

Reproducing the Issue

  1. Go to Purchase Requests and Orders work center
  2. Go to Purchase Orders
  3. Search for respective Purchase Order and click on edit
  4. Go to Items tab
  5. Navigate to Taxes tab

You will see a different tax code other than what you expected as per exemption that you maintained in Product master data.

Cause

Cause 1:

The region/ province/state  of tax exemption reason maintained in product master and the  region/ province/state in the Ship to address/Recipient address of the purchase order should match.

Cause 2: Tax rate type should be  "zero" in the  Product master Data

Resolution

1.

  1. Go to Supply chain design master data work center
  2. Go to Locations View
  3. Search for the Ship to that is maintained in purchase order
  4. Select it and Click on Edit
  5. Scroll down and go to Site address section
  6. Scroll down and Click on Additional fields
  7. In the pop up enter the Region/state/ province

and

  1. Go to Product Portfolio work center
  2. Go to Products view
  3. Search for the respective Product
  4. Go to Taxes tab
  5. Click on Add row and enter all details and ensure you choose  same Region/Province that appears in the Ship to address/ Recipient address of the Purchase order or Supplier invoice
  6. Click on save

2.Ensure you have maintained tax rate type as 'zero' in Product master

See Also

1785785 - Tax Rate Type Defaults to Zero in Purchase Order Although Taxes are Expected for the Transaction 

Keywords

Wrong tax code , exemption reason not considered, tax code determined in Purchase order is wrong,correct tax code not determined. , KBA , wrong tax code , exemption reason not considered , tax code determined in purchase order is , correct tax code not determined , tax code , supplier invoice tax code determination , AP-POP-PO , Purchase Order , AP-SIP , Supplier Invoice Processing , Problem

Product

SAP Business ByDesign all versions