3535057 - Tax Code is Not Updated After Changing the Tax Country in Sales Order

In the sales order document, the default tax country determined in the item line is for example CA and tax code is 501. You manually change the tax country to US, and find the tax code remains 501 while you expect the tax should be 515 for export.

SAP Business ByDesign

1. Go to the Sales Orders Work Center view.
2. Open the sales order ABC.
3. Go to Items tab, select line 10. Notice that the ship from is in country US and ship to is in country CA. It is an export transaction.
4. Go to the Taxes tab, the tax country is CA and tax code is 501 for GST tax. You manually change the tax country to US and expect the tax code 515 for export could be re-determined. But system remains the tax code as 501.

This is because you have maintained an External Tax Determination rule XYZ which matches the order ABC. So the tax code 501 is determined from the rule. (XYZ represents the ID of the rule)

When creating the sales order, the taxation is done based on complete document and the tax code was enforced to 501 as per the External Tax Determination rule, that is reason after changing the tax country from CA to US tax code is not getting updated. 

You can check the External Tax Determination rules by the steps below.

1. Go to the Business Configuration work center.
2. Go to the Overview view.
3. Search and open the activity "External Tax Determination for Goods and Services". 
4. There is a rule XYZ, the order ABC matches the rule. and the enforced tax code is 501. 

The condition maintained as following, (as an example)

In Location Details:

• Ship-From: single country US.
• Ship-To: Single country CA, state AB.

Tax Code Details:

• Use Dedicated Tax Code: ticked.
• Tax Code: 501.

This is the designed system behavior. 

You can manually change the tax code in the sales order.

tax code; tax country; external tax determination. , KBA , SRD-CRM-ORD , Orders & Contracts , Problem