How To Fix O1654 - Tax code & is not valid for customer receivables. Enter output tax code.

SAP Error Message - Details

• Message type: E = Error

• Message class: O1 - IS-Oil : Message pool exchanges

• Message number: 654

• Message text: Tax code & is not valid for customer receivables. Enter output tax code.

What causes this issue?

Tax code &V1& is not relevant for calculating taxes on customer
receivables.

System Response

The system checks table T007A to determine the tax type. Tax code &V1&
has tax type &V2& which is used for payables (input tax code).

How to fix this error?

Select a tax code that is used for Output tax. Tax type 'A'.

Error message extract from SAP system. Copyright SAP SE.

Smart SAP Assistant

• What is the cause and solution for SAP error message O1654 - Tax code & is not valid for customer receivables. Enter output tax code. ?

  The SAP error message O1654 indicates that the tax code you are trying to use for customer receivables is not valid. This typically occurs when the system expects a specific output tax code for a transaction, but the provided tax code does not meet the necessary criteria.
  Cause:
  
  Invalid Tax Code: The tax code entered may not be defined for the customer or the specific transaction type.
  Configuration Issues: The tax code may not be properly configured in the system for the relevant country or region.
  Customer Master Data: The customer master record may not have the correct tax classification or settings.
  Transaction Type: The transaction type may not be compatible with the tax code being used.
  
  Solution:
  
  Check Tax Code: Verify that the tax code you are using is valid and active in the system. You can do this by navigating to the tax code configuration in SAP (Transaction Code: OBYZ).
  Review Customer Master Data: Ensure that the customer master record has the correct tax classification. You can check this in the customer master data (Transaction Code: XD02 for change).
  Configure Tax Codes: If the tax code is not defined, you may need to create or modify it in the tax configuration settings. This can be done in the following way:
  
  Go to Transaction Code: OBYZ to maintain tax codes.
  Ensure that the tax code is assigned to the correct tax type and is valid for the relevant country.
  
  
  Check Transaction Type: Ensure that the transaction type you are using is compatible with the tax code. You may need to consult with your SAP configuration team to verify this.
  Output Tax Code: If the system is prompting for an output tax code, ensure that you enter a valid output tax code that is configured for customer receivables.
  
  Related Information:
  
  Tax Configuration: Familiarize yourself with the tax configuration settings in SAP, as they can vary by country and business requirements.
  SAP Notes: Check for any relevant SAP Notes that may address specific issues related to tax codes and customer receivables.
  Documentation: Review SAP documentation or guides related to tax handling in your specific version of SAP, as tax handling can differ between versions.
  
  If the issue persists after checking the above points, it may be beneficial to consult with your SAP support team or a functional consultant who specializes in tax configuration.