How To Fix FQ637 - Tax commitment item will be lost for non-deductible tax

SAP Error Message - Details

• Message type: E = Error

• Message class: FQ - Payment Requests and Payment Program

• Message number: 637

• Message text: Tax commitment item will be lost for non-deductible tax

What causes this issue?

With the chosen tax code &V1& the program distributes the tax amount to
the expense items automatically.

System Response

The system cannot process information about a separate tax commitment
item because the tax amount is not posted to a separate expense
account.

How to fix this error?

Check your entries.

Procedure for System Administrators

The system issues an error message and will not allow you to continue with this transaction until the error is resolved.

Error message extract from SAP system. Copyright SAP SE.

Smart SAP Assistant

• What is the cause and solution for SAP error message FQ637 - Tax commitment item will be lost for non-deductible tax ?

  The SAP error message FQ637 indicates that there is a tax commitment item that will be lost due to the non-deductibility of the tax. This typically occurs in the context of tax processing in SAP, particularly when dealing with tax codes that are marked as non-deductible.
  Cause:
  
  Non-Deductible Tax Code: The tax code used in the transaction is configured as non-deductible. This means that the tax amount cannot be claimed back or deducted from the tax liability.
  Configuration Issues: There may be issues in the configuration of tax codes or tax determination procedures in the SAP system.
  Transaction Type: The type of transaction being processed may not allow for the tax commitment item to be retained due to its non-deductible nature.
  
  Solution:
  
  Review Tax Code Configuration: Check the configuration of the tax code being used. Ensure that it is set up correctly in the system and that it is intended to be non-deductible.
  Change Tax Code: If the tax should be deductible, consider changing the tax code to a deductible one. This may involve updating the transaction or invoice to use a different tax code.
  Adjust Transaction: If the transaction does not require the non-deductible tax, you may need to adjust the transaction to remove the non-deductible tax component.
  Consult with Tax Experts: If you are unsure about the tax implications or the correct tax code to use, consult with your finance or tax department to ensure compliance with tax regulations.
  
  Related Information:
  
  SAP Notes: Check SAP Notes for any specific guidance or updates related to this error message. SAP frequently releases notes that address known issues and provide solutions.
  Documentation: Review SAP documentation related to tax configuration and management to ensure that your settings align with best practices.
  Testing: After making changes, conduct thorough testing to ensure that the error does not recur and that tax calculations are accurate.
  
  By addressing the configuration and ensuring the correct tax codes are used, you can resolve the FQ637 error and ensure proper tax handling in your SAP system.