3109103 - Error - External Reference <XYZ>: Error in tax recalculation due to <ABC> <DEF> discount. Use a Payment Difference Reason that is not relevant for tax adjustment. (KBA: 3109103)

You get the error message "External Reference <XYZ>: Error in tax recalculation due to <ABC> <DEF> discount. Use a Payment Difference Reason that is not relevant for tax adjustment. (KBA: 3109103)" when trying to clear the Invoice and Payment manually.

 SAP Business ByDesign

1. Go to Receivables work centre.
2. Click on Customer Accounts view.
3. Search for the Account and Click View. 
4. Click on Clearing ID. 
5. In the next screen You find the error message - "External Reference <XYZ>: Error in tax recalculation due to <ABC> <DEF> discount. Use a Payment Difference Reason that is not relevant for tax adjustment. (KBA: 3109103)", once you click on Clear. 

This occurs when the Transaction currency and the Tax Reporting Currency of the document are different. During clearing/payment, a negligible discount is applied, and the adjustment is relevant for tax recalculation.

Example:

Customer Invoice created with Transaction Currency in EUR and Tax Reporting Currency in DKK .

Exchange Rate Applied = 7.44

During clearing/payment, when a negligible discount is applied, for example 0.01 EUR, the Tax Lines in Transaction Currency are adjusted as follows:

The Tax Amount is then rounded off to two digits = 0.002 rounded to 0.00. Hence in the Transaction Currency, the Tax Amount = 0.00

Further, in the Reporting Currency the discount applied would be 0.01 * 7.44 = 0.0744
The Tax Lines adjusted in Reporting Currency would be:

The Tax Amount is then rounded off to two digits = 0.01488 rounded to 0.01. Hence in the Reporting Currency the Tax Amount = 0.01

You have to post the discount against a Payment Difference Reason that is not tax adjustment relevant.

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