Intercompany Financial Posting 1GP - Different tax countries are not permitted

[Gabor5]

Hello Experts,

We are trying to post an intercompany financial transaction between two company codes (different countries) and we get this error message:

Different tax countries are not permitted

Taxes are always posted in the initial company code for cross-company-code transactions and stored in the tax information (BSET) of the initial company code. It has not been defined how taxes are subsequently handled when the countries of the company codes involved are different. An integrated company in the sales tax sense can no longer apply because the taxes relate to company codes for different countries.

System Response

Such transactions are not defined and are not permitted.

What is the point then of this test script if this isn't allowed? Why isn't this allowed? The error message is kind of blurry to me. We haven't included any taxes, the tax rate is 0% and the tax code used was V0. It works if the company codes are from the same country but unfortunately that's not useful in our case.

Thank you in advance!

[Chuma]

Hello @Gabor5 

In S/4HANA Public Cloud, intercompany journal entries between different tax countries are prohibited when taxes are involved due to strict legal and system design constraints. Use SAP-provided intercompany business scenarios or AR/AP flows to comply with cross-border tax requirements.

Thank you, and kind regards.

Chuma..

[Gabor5]

Hello Chuma. Thank you for your answer. I understand that this prohibited when taxes are involved, but we used a tax rate of 0% with the tax code V0.

[Gabor5]

Hello Chuma. Did you have the chance to check my previous comment?