You are creating Purchase Order XYZ (XYZ represents the Purchase Order ID) for your company located in Country A (A represents the country of your company) to a Supplier located in Country B (B represents the Supplier's country).
In the Supplier Master Data, under Financial Data, in Tax Data, you have maintained a Tax Exemption for Country X with the Tax Reason Resale- Exempt Purchase, Taxable sale.
In the Taxes tab of the Item details, you can see that Taxes have been applied and the Tax Exemption isn't taken into account.
Reproducing the Issue
- Go to Purchase Requests and Orders.
- Go to Purchase Orders.
- Select Show All Purchase Orders.
- Find XYZ.
- Select Edit.
- Select View All.
- Go to the Items tab.
- Go to the Taxes tab of Item details
A Taxable tax code is selected by the system, despite a Tax Exemption being maintained in the Supplier Master Data.
The Tax Exemptions set up the Supplier Master Data are only applicable for domestic transactions.
If the purchase involves a country foreign to the company's country, the Tax exemptions need to be maintained:
- either in the Product Master Data;
- or in the Purchase Order by changing the Tax code manually.
KBA , AP-PRP , Purchase Request Processing , How To