How To Fix 5D437 - Flat-rate taxation (0026) and additional tax exemption not allowed

5D437 - Overview

• Message type: E = Error

• Message class: 5D - Error Messages for German Infotype Module Pools

• Message number: 437

• Message text: Flat-rate taxation (0026) and additional tax exemption not allowed

What causes this issue?

The contract model uses a module with additional tax exemption under
sec. 3 no. 63. cl. 3 EStG.
An infotype record 0026 (Company Insurance - D) uses flat rate taxation
under sec. 40b EStG for legacy commitments in the validity period.
You cannot use both taxation options, however.

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?

Check the infotype records and change the taxation type as necessary.

Procedure for System Administrators

Error message extract from SAP system. Copyright SAP SE.

Smart SAP Assistant

• What is the cause and solution for SAP error message 5D437 - Flat-rate taxation (0026) and additional tax exemption not allowed ?

  The SAP error message 5D437 indicates that there is an issue with flat-rate taxation in the context of a specific tax exemption. The message states: "Flat-rate taxation (0026) and additional tax exemption not allowed." This typically occurs in scenarios where a flat-rate tax is applied, but there is an attempt to apply an additional tax exemption that is not compatible with the flat-rate taxation rules.
  
  Cause:
  
  Incompatible Tax Settings: The system is configured to apply flat-rate taxation, but the transaction or document being processed is attempting to apply an additional tax exemption that is not allowed under the current tax configuration.
  Incorrect Tax Code: The tax code used may not be set up correctly to allow for both flat-rate taxation and additional exemptions.
  Master Data Issues: The customer or vendor master data may have settings that conflict with the flat-rate taxation rules.
  
  
  Solution:
  
  Review Tax Configuration: Check the tax configuration in the SAP system to ensure