How To Fix FC121 - Reduced tax rate should be less than the normal tax rate

SAP Error Message - Details

• Message type: E = Error

• Message class: FC - FI configuration error messages

• Message number: 121

• Message text: Reduced tax rate should be less than the normal tax rate

Self-Explanatory Message

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Smart SAP Assistant

• What is the cause and solution for SAP error message FC121 - Reduced tax rate should be less than the normal tax rate ?

  The SAP error message FC121 ("Reduced tax rate should be less than the normal tax rate") typically occurs in the context of tax calculations in financial transactions, particularly when dealing with VAT (Value Added Tax) or sales tax. This error indicates that the system has detected an inconsistency between the reduced tax rate and the normal tax rate defined in the system.
  Cause:
  
  Incorrect Tax Rate Configuration: The reduced tax rate has been set equal to or higher than the normal tax rate in the tax configuration settings.
  Data Entry Error: During the entry of a transaction, the reduced tax rate may have been incorrectly inputted.
  Tax Code Misconfiguration: The tax codes associated with the transaction may not be set up correctly, leading to this error.
  
  Solution:
  
  
  Check Tax Rate Configuration:
  
  Go to the transaction code OBYZ (or the relevant transaction for your version) to check the tax rate settings.
  Ensure that the reduced tax rate is indeed lower than the normal tax rate. If not, adjust the reduced tax rate accordingly.
  
  
  
  Review Tax Codes:
  
  Use transaction code FTXP to review the tax codes and their associated rates.
  Verify that the tax codes for both normal and reduced rates are correctly defined.
  
  
  
  Correct Transaction Entry:
  
  If the error occurred during a specific transaction entry, review the transaction details to ensure that the correct tax codes and rates are being applied.
  Make any necessary corrections to the transaction.
  
  
  
  Consult Documentation:
  
  If you are unsure about the correct tax rates, consult your organization's tax documentation or a tax professional to ensure compliance with local tax regulations.
  
  
  
  Testing:
  
  After making changes, perform a test transaction to ensure that the error no longer occurs.
  
  
  
  Related Information:
  
  SAP Notes: Check SAP Notes for any known issues or updates related to tax rate configurations.
  Tax Compliance: Ensure that your tax rates comply with local regulations, as incorrect configurations can lead to compliance issues.
  User Roles: Ensure that users responsible for tax configuration have the appropriate roles and authorizations to make changes.
  
  If the issue persists after following these steps, it may be beneficial to consult with your SAP support team or a consultant who specializes in SAP financial modules.