If you want to use your own exchange rate to translate taxes for postings in foreign currency, you must first make the relevant settings in the Implementation Guide (IMG) for Financial Accounting. You specify that a separate exchange rate can be entered manually or automatically for translating tax amounts. You must also define an account for posting exchange rate differences in the IMG. See also Configuring the System Using the Implementation Guide.

If during document entry you use an exchange rate for translating tax amounts that differs from the rate in the document header, the system takes the resulting difference (in local currency) into account, and creates a separate line item for it when posting is made. This exchange rate difference is also displayed on the tax screen. If the tax amounts in local currency are changed manually, this does not result in an exchange rate difference posting.

If you do not enter an exchange rate and there is no default entry, the taxes are calculated in the normal way.