How To Fix F7318 - Tax code &1 is used for deferred taxes

SAP Error Message - Details

• Message type: E = Error

• Message class: F7 - Program Error Messages

• Message number: 318

• Message text: Tax code &1 is used for deferred taxes

What causes this issue?

Tax codes that are relevant for input VAT refunds must not be used for
deferred 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?

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 F7318 - Tax code &1 is used for deferred taxes ?

  The SAP error message F7318 indicates that a specific tax code is being used for deferred taxes, which is not allowed in certain contexts. This error typically arises when trying to post a transaction that involves a tax code that is designated for deferred tax purposes, but the system does not allow such postings in the current context.
  Cause:
  
  Tax Code Configuration: The tax code in question is configured for deferred tax purposes in the system. This means it is intended to be used in specific scenarios, such as tax deferral or tax reconciliation, rather than standard transactions.
  Posting Context: The transaction you are trying to post may not be compatible with the use of deferred tax codes. For example, certain types of postings (like standard sales or purchases) may not allow deferred tax codes.
  Incorrect Tax Code Usage: The tax code may have been incorrectly assigned to a transaction that does not support deferred taxes.
  
  Solution:
  
  Review Tax Code Configuration: Check the configuration of the tax code in the SAP system. Ensure that it is set up correctly for the intended use. You can do this by navigating to the tax code settings in the SAP configuration (Transaction Code: OBYZ).
  Use Appropriate Tax Code: If the transaction does not require deferred tax treatment, replace the deferred tax code with a standard tax code that is appropriate for the transaction type.
  Consult with Finance Team: If you are unsure about which tax code to use, consult with your finance or accounting team to ensure compliance with tax regulations and proper accounting practices.
  Check Posting Rules: Review the posting rules and ensure that the transaction type you are trying to post allows for the use of the tax code in question.
  
  Related Information:
  
  Tax Code Types: Understand the different types of tax codes in SAP, such as standard tax codes, exempt tax codes, and deferred tax codes, and their appropriate usage.
  SAP Documentation: Refer to SAP Help documentation for detailed information on tax code configuration and usage.
  Transaction Codes: Familiarize yourself with relevant transaction codes such as OBYZ (for tax code configuration) and FB50 (for general ledger postings) to troubleshoot and resolve issues effectively.
  
  By following these steps, you should be able to resolve the F7318 error and ensure that the correct tax codes are used in your transactions.