1943133 - Tax code is not selected automatically for Free-Text Service Item in the Supplier Invoice

While creating supplier Invoice, you choose the product type as material and select the product category. The Tax code is correctly gets selected automatically in Invoice. However when you select the Product Type as Service,system doesn't propose any tax code. You have to manually select the appropriate tax code. You also gets the following warning message.

Item XX: Determination of Tax Code Failed.

 SAP Business ByDesign

1. Go to the Supplier Invoicing work center, and choose the Invoice Entry view.
2. Choose New Invoice Without Purchase Order under New.
3. Choose the purchasing company, invoicer, or supplier.
4. Specify the external document number, invoice date, value, and tax amount.
5. Choose View All.
6. In the Items tab, add one item.
7. Select the Product Category and choose product type as Service
8. Click on Post

Or

Create a new Purchase Order, Tax code is not fetched automatically for the line items under items tab-> tax sub tab.

You have changed the default deductibility code for the country XX in the fine tuning activity "Tax Settings for Purchasing" to 3 - Not deductible from 1 - Fully Deductible. Due to this, the tax code determination is failing.

1. Go to the Business Configuration work center.
2. Go to Overview.
3. Search and find the activity Tax Settings for Purchasing.
4. Click Change Immediately.
5. Select the country in the Available Deductibility Types list.
6. Scroll down to the bottom of the page and check the Deductible code.

Once you change the default deductibility code to 1 - Fully Deductible, the tax code will be determined correctly.

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