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 ,

My apologies for the delay,

Even with a 0% tax code like V0, SAP S/4HANA Cloud Public Edition treats the entry as tax-relevant, and intercompany journal entries across different tax countries are restricted. This is due to compliance and system design rules. SAP recommends using intercompany AR/AP flows or standard business scenarios to handle such transactions correctly.

Let me know if you need more support

Thank you and kind regards

Chuma