FF727 - This tax code does not contain a deductible portion

SAP Error Message - Details

• Message type: E = Error

• Message class: FF - FI Function Module Messages

• Message number: 727

• Message text: This tax code does not contain a deductible portion

What causes this issue?

The used tax code does not contain a tax percentage for deductible
taxes.

System Response

The system issues an error message and will not allow you to continue with this transaction until the error is resolved.

How to fix this error?

Please use another tax code which contains deductible and
nondeductible tax.

Error message extract from SAP system. Copyright SAP SE.

Smart SAP Assistant

• What is the cause and solution for SAP error message FF727 - This tax code does not contain a deductible portion ?

  The SAP error message FF727, which states "This tax code does not contain a deductible portion," typically occurs during the processing of financial transactions involving tax codes in SAP. This error indicates that the tax code being used does not have a portion that can be deducted for tax purposes, which is often relevant in the context of VAT (Value Added Tax) or sales tax.
  Cause:
  
  Tax Code Configuration: The tax code in question may not be configured to allow for a deductible portion. This can happen if the tax code is set up as a non-deductible tax code or if it is meant for transactions that do not allow for input tax deduction.
  Transaction Type: The nature of the transaction may not qualify for a deductible tax portion. For example, certain expenses may not be eligible for VAT recovery.
  Incorrect Tax Code Usage: The user may have selected an incorrect tax code for the transaction, which does not align with the nature of the expense or revenue.
  
  Solution:
  
  
  Check Tax Code Configuration:
  
  Go to the SAP transaction code OBYZ (or use the appropriate transaction for your version) to review the configuration of the tax code.
  Ensure that the tax code is set up correctly to allow for a deductible portion if it is supposed to be deductible.
  
  
  
  Use the Correct Tax Code:
  
  Verify that the tax code being used is appropriate for the transaction. If the transaction should allow for a deductible portion, select a different tax code that is configured for that purpose.
  
  
  
  Consult with Finance Team:
  
  If you are unsure about the correct tax code to use, consult with your finance or accounting team to ensure compliance with tax regulations and proper accounting practices.
  
  
  
  Review Transaction Type:
  
  Ensure that the transaction type aligns with the tax code being used. For example, if the transaction is related to a non-deductible expense, you may need to use a different tax code.
  
  
  
  Related Information:
  
  Tax Code Maintenance: Regularly review and maintain tax codes in SAP to ensure they are up-to-date with current tax regulations and business requirements.
  Documentation: Keep documentation on tax code usage and configurations to assist users in selecting the correct codes.
  SAP Notes: Check SAP Notes for any updates or patches related to tax code handling that may address specific issues or provide additional guidance.
  
  By following these steps, you should be able to resolve the FF727 error and ensure that the correct tax codes are being used in your SAP transactions.