How To Fix EXTAX_CHECK_US020 - Incorrect default jurisdiction code for non-taxable transactions.

SAP Error Message - Details

• Message type: E = Error

• Message class: EXTAX_CHECK_US - Message for Extax configuration check

• Message number: 020

• Message text: Incorrect default jurisdiction code for non-taxable transactions.

What causes this issue?

Because the unified jurisdiction code structure (UJCS) is active for the
US, the jurisdiction code for non-taxable transactions must be
?US0000000000000?.

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?

Open the Set Up US Tax Calculation Procedure configuration step. Select
Assign Tax Codes for Non-Taxable Transactions. In the Jurisdiction Code
column, change the jurisdiction code to ?US0000000000000? and save.
If the problem persists, please create an incident for component
FI-CNT-GL.

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 EXTAX_CHECK_US020 - Incorrect default jurisdiction code for non-taxable transactions. ?

  The SAP error message EXTAX_CHECK_US020 indicates that there is an issue with the jurisdiction code being used for non-taxable transactions. This error typically arises in the context of tax determination in the United States, where specific jurisdiction codes are required for different types of transactions, including taxable and non-taxable ones.
  Cause:
  
  Incorrect Jurisdiction Code: The jurisdiction code assigned to the transaction is not valid for non-taxable transactions. This can happen if the system is configured to expect a specific jurisdiction code for non-taxable items, but the code provided does not meet the criteria.
  Configuration Issues: The tax configuration in the SAP system may not be set up correctly, leading to mismatches between the jurisdiction codes and the transaction types.
  Master Data Issues: The master data for customers, vendors, or materials may not have the correct tax classification or jurisdiction code assigned.
  
  Solution:
  
  Check Jurisdiction Code: Verify the jurisdiction code being used for the transaction. Ensure that it is appropriate for non-taxable transactions. You may need to consult with your tax department or refer to local tax regulations to confirm the correct code.
  Review Tax Configuration: Go to the SAP configuration settings (Transaction SPRO) and review the tax settings under the following path:
  
  Financial Accounting (New) > Tax on Sales/Purchases > Basic Settings > Check Calculation Procedure.
  Ensure that the calculation procedure is correctly set up to handle non-taxable transactions and that the jurisdiction codes are correctly mapped.
  
  
  Update Master Data: Check the master data for the relevant customer, vendor, or material. Ensure that the tax classification and jurisdiction codes are correctly assigned. You can do this in the customer or vendor master records (Transaction XD02 or VD02) or material master records (Transaction MM02).
  Consult Documentation: Refer to SAP documentation or help resources for specific guidance on jurisdiction codes and tax determination processes in your version of SAP.
  Testing: After making changes, perform a test transaction to ensure that the error no longer occurs.
  
  Related Information:
  
  SAP Notes: Check for any relevant SAP Notes that may address this specific error or provide additional guidance on jurisdiction codes and tax settings.
  Tax Compliance: Ensure that your organization is compliant with local tax regulations, as incorrect jurisdiction codes can lead to tax reporting issues.
  User Training: Provide training for users involved in transaction processing to ensure they understand the importance of correct jurisdiction codes and tax classifications.
  
  If the issue persists after following these steps, it may be beneficial to consult with your SAP support team or a tax consultant familiar with SAP tax configuration.