Items Not Assigned Correct Tax Code Rate (Doc ID 2903636.1)

Last updated on OCTOBER 20, 2022

Applies to:

Symptoms

The customer uses different tax codes, but all these tax codes are related to the VAT tax regime. Specifically, a unique VAT tax code is assigned to a particular VAT tax rate.

In addition, different VAT tax codes are used to represent domestic, intra-EU and import transactions. In a context where different tax codes are used for different tax rates, the GTS conflict management engine for tax rules (which gives priority to tax rules at lower levels of the merchandise hierarchy, safeguarding that the tax code is the same for all tax rules in question) does not identify any conflicts and therefore the different tax rules/tax codes will accumulate at the item level.

The ability to recognize that different tax codes are part of the same family (i.e., the VAT tax regime) is essential to reduce the number of tax rules, making GTS maintenance simpler and less prone to mistakes.

For example:

1 - Create and Activate department-level tax rule for department 12 using tax code S (standard) and tax rate 23%

2 - Create and Activate item-level tax rule for item 100201248 (which belongs to department 12) using tax code R (reduced) and tax rate 23%

Issue: The tax information in item 100201248 accumulates the Tax Code S (23%) and the Tax Code R (8%). Therefore, item 100201248 ends up being taxed at 31% while the desirable result would be only 8%, if the Tax Code S and the Tax Code R were considered part of the same family.

Cause

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