How To Fix FF732 - Tax code & may not contain a nondeductible portion

SAP Error Message - Details

• Message type: E = Error

• Message class: FF - FI Function Module Messages

• Message number: 732

• Message text: Tax code & may not contain a nondeductible portion

What causes this issue?

In the case of direct postings to tax accounts, no tax codes
containing a nondeductible portion to be distributed may be used.

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?

Please use another tax code. You might have to define a separate
tax code, that does not contain a nondeductible portion, for direct
postings to a tax account.

Error message extract from SAP system. Copyright SAP SE.

Smart SAP Assistant

• What is the cause and solution for SAP error message FF732 - Tax code & may not contain a nondeductible portion ?

  The SAP error message FF732 indicates that there is an issue with the tax code being used in a transaction. Specifically, it states that the tax code may not contain a nondeductible portion. This typically occurs in the context of financial transactions where tax codes are applied to determine the deductibility of certain expenses.
  Cause:
  
  Incorrect Tax Code Configuration: The tax code being used may be configured to include a nondeductible portion, which is not allowed in the context of the transaction you are trying to process.
  Transaction Type: The type of transaction (e.g., invoice, payment) may not support the use of a tax code that has nondeductible components.
  Master Data Issues: The vendor or customer master data may have settings that conflict with the tax code being applied.
  Tax Jurisdiction: The tax jurisdiction settings may not align with the tax code being used, leading to this error.
  
  Solution:
  
  
  Review Tax Code Configuration: Check the configuration of the tax code in the SAP system. Ensure that it does not include a nondeductible portion if the transaction requires a fully deductible tax code.
  
  Navigate to the transaction code OBYZ to review and adjust tax code settings.
  
  
  
  Use an Appropriate Tax Code: If the current tax code is not suitable, select a different tax code that is fully deductible for the transaction type you are processing.
  
  
  Check Transaction Type: Ensure that the transaction type you are processing allows for the use of the selected tax code. If necessary, consult with your finance team to confirm the correct tax treatment.
  
  
  Review Master Data: Check the vendor or customer master data for any settings that may be causing the conflict. Ensure that the tax information is correctly maintained.
  
  
  Consult with Tax Experts: If you are unsure about the tax implications or the correct tax code to use, consult with your organization's tax department or a tax advisor.
  
  
  Related Information:
  
  SAP Notes: Check for any relevant SAP Notes that may address this specific error or provide guidance on tax code configuration.
  Documentation: Review SAP documentation related to tax codes and their configuration to ensure compliance with local tax regulations.
  Testing: After making changes, perform testing in a development or quality assurance environment to ensure that the issue is resolved before applying changes in the production environment.
  
  By following these steps, you should be able to resolve the FF732 error and ensure that the correct tax code is applied to your transactions.