How To Fix 5D793 - Tax class & not allowed for those liable to reduced tax

SAP Error Message - Details

• Message type: E = Error

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

• Message number: 793

• Message text: Tax class & not allowed for those liable to reduced tax

What causes this issue?

According to ?39d(1) Income Tax Laws, only tax classes 1 and 6 are
valied for those liable to restricted tax.
An exception are the cross-border Dutch employees, who are coded with a
special rule.
According to this rule (A.125(9) Income Tax Law 90), the tax classes 1,
3, 4 and 6 are valid for the cross-border Dutch employees.

Error message extract from SAP system. Copyright SAP SE.

Smart SAP Assistant

• What is the cause and solution for SAP error message 5D793 - Tax class & not allowed for those liable to reduced tax ?

  The SAP error message "5D793 Tax class & not allowed for those liable to reduced tax" typically occurs when there is an issue with the tax classification of a material or service in relation to the tax settings in the system. This error is often encountered during the processing of invoices, sales orders, or other financial transactions where tax calculations are involved.
  Cause:
  
  Incorrect Tax Classification: The tax class assigned to the material or service does not align with the tax regulations for entities that are eligible for reduced tax rates.
  Configuration Issues: The tax configuration in the SAP system may not be set up correctly, leading to conflicts between the tax class and the reduced tax status.
  Master Data Issues: The master data for the customer or vendor may not be correctly maintained, particularly regarding tax classifications and exemptions.
  Legal Changes: Changes in tax laws or regulations that affect the classification of goods and services may not have been updated in the system.
  
  Solution:
  
  Review Tax Classifications: Check the tax class assigned to the material or service in question. Ensure that it is appropriate for the type of transaction and the tax status of the customer or vendor.
  Update Master Data: Verify and update the master data for the customer or vendor to ensure that the tax classifications are correctly maintained. This includes checking the tax exemption status and any relevant tax codes.
  Check Configuration: Review the tax configuration settings in the SAP system. Ensure that the tax codes and classes are correctly defined and that they comply with the current tax regulations.
  Consult Documentation: Refer to SAP documentation or consult with your SAP support team to understand the specific requirements for tax classifications and reduced tax rates in your jurisdiction.
  Testing: After making changes, perform tests to ensure that the error no longer occurs and that tax calculations are accurate.
  
  Related Information:
  
  SAP Notes: Check for any relevant SAP Notes that may address this specific error message or provide guidance on tax configuration.
  Transaction Codes: Familiarize yourself with transaction codes such as OBYZ (for tax codes) and OVK1 (for tax classification) to review and adjust settings.
  Tax Jurisdictions: Be aware of the specific tax jurisdictions and regulations that apply to your business, as these can vary significantly by region and can impact tax classifications.
  User Roles: Ensure that users have the appropriate roles and permissions to make changes to tax classifications and master data.
  
  If the issue persists after following these steps, it may be beneficial to engage with your SAP support team or a consultant who specializes in SAP tax configuration.