When you enter item information in marketing documents, SAP Business One checks the item master data. If the item classification for tax purposes is:
Material Item
The tax code determination for materials begins.
Service Item
The tax code determination for services begins.
When you enter service information in marketing documents, the tax code determination for service documents begins.
The key fields information for the tax code determination is according to your entries in the marketing documents, such as BP Code, Item Code and so on.
Note
Usage is a required value for tax code determination for material items.
The posting date of the marketing document is used to check the valid period of the tax code determination.
Based on information in these key fields, SAP Business One searches the priority table and checks the Priority 1 relevant tables.
To retrieve the tax code, SAP Business One proceeds as follows:
Finds a row matching these key fields in the valid period, it retrieves the tax code.
Cannot find any matching row in Priority 1, it checks Priority 2, then Priority 3 tables, and so on, until it finds a proper tax code.
Cannot find any proper tax code in the priority table, it checks Default Tax Code for Sales or Default Tax Code for Purchase.
Cannot find any proper tax code, it leaves the Tax Code field blank.
Note
When you change any of the key fields in a marketing document, the tax code determination runs again to retrieve the correct tax code.