How To Fix M8704 - Tax code & invalid (Tax schema &)

SAP Error Message - Details

• Message type: E = Error

• Message class: M8 - Invoice Verification/Valuation

• Message number: 704

• Message text: Tax code & invalid (Tax schema &)

What causes this issue?

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

System Response

The tax code you entered is not defined.

How to fix this error?

Correct your entry in the "Tax Code" field.

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 M8704 - Tax code & invalid (Tax schema &) ?

  The SAP error message M8704 indicates that there is an issue with the tax code being used in a transaction. Specifically, it states that the tax code is invalid for the tax schema being referenced. This error typically arises in the context of materials management, particularly during the posting of goods movements or invoice verification.
  Cause:
  
  Invalid Tax Code: The tax code entered does not exist in the system or is not valid for the specific tax schema being used.
  Configuration Issues: The tax code may not be properly configured in the system, or it may not be assigned to the relevant tax schema.
  Master Data Issues: The material master or vendor master data may not have the correct tax information set up.
  Country-Specific Settings: The tax code may not be applicable for the country or region specified in the transaction.
  
  Solution:
  
  Check Tax Code: Verify that the tax code entered is correct and exists in the system. You can do this by navigating to the tax code configuration in the SAP system (Transaction Code: OB40).
  Review Tax Schema: Ensure that the tax schema being used is correctly configured and that the tax code is assigned to it. You can check this in the configuration settings for tax calculation (Transaction Code: OBYZ).
  Update Master Data: If the tax code is valid but not assigned to the material or vendor, update the relevant master data records to include the correct tax code.
  Consult Documentation: Review the SAP documentation or consult with your SAP support team to ensure that the tax codes and schemas are set up according to your organization's requirements.
  Testing: After making changes, perform a test transaction to ensure that the error has been resolved.
  
  Related Information:
  
  Transaction Codes: 
  
  OB40: Maintain Tax Codes
  OBYZ: Maintain Tax Schema
  MM01/MM02: Material Master Creation/Change
  XK01/XK02: Vendor Master Creation/Change
  
  
  SAP Notes: Check for any relevant SAP Notes that may address specific issues related to tax codes and schemas.
  Documentation: Review SAP Help documentation for tax configuration and management to ensure compliance with local tax regulations.
  
  If the issue persists after following these steps, it may be necessary to engage with your SAP support team or a consultant for further investigation.