How To Fix OB047 - Tax rate cannot be created for handling type with untaxed tax indicator

SAP Error Message - Details

• Message type: E = Error

• Message class: OB - IS-OIL Downstream TDP messages

• Message number: 047

• Message text: Tax rate cannot be created for handling type with untaxed tax indicator

Self-Explanatory Message

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Smart SAP Assistant

• What is the cause and solution for SAP error message OB047 - Tax rate cannot be created for handling type with untaxed tax indicator ?

  The SAP error message OB047, which states "Tax rate cannot be created for handling type with untaxed tax indicator," typically occurs when there is an attempt to create a tax rate for a handling type that is designated as untaxed. This situation can arise in the context of configuring tax rates in the SAP system, particularly in the Financial Accounting (FI) or Sales and Distribution (SD) modules.
  Cause:
  
  Handling Type Configuration: The handling type you are trying to create a tax rate for is configured as "untaxed." This means that it is not intended to have any tax applied to it.
  Tax Indicator Settings: The tax indicator associated with the handling type may be set to indicate that it is exempt from tax, which conflicts with the attempt to create a tax rate.
  Incorrect Tax Code Assignment: There may be an incorrect assignment of tax codes or tax rates that do not align with the handling type's configuration.
  
  Solution:
  
  
  Review Handling Type Configuration:
  
  Go to the configuration settings for the handling type in question (Transaction Code: OBCO or similar).
  Check if the handling type is indeed set to "untaxed." If it is, you cannot create a tax rate for it. You may need to change the handling type if it should be taxable.
  
  
  
  Adjust Tax Indicator:
  
  If the handling type should be taxable, consider changing the tax indicator to a taxable status. This can be done in the configuration settings for tax indicators.
  
  
  
  Create a New Handling Type:
  
  If the handling type must remain untaxed, and you need to apply tax, consider creating a new handling type that is configured to allow tax rates.
  
  
  
  Consult Documentation:
  
  Review SAP documentation or help files related to tax configuration to ensure that you are following the correct procedures.
  
  
  
  Check for Customizations:
  
  If your organization has custom configurations or enhancements, check with your SAP Basis or ABAP team to see if there are any custom rules affecting tax handling.
  
  
  
  Testing:
  
  After making changes, test the configuration by attempting to create the tax rate again to ensure that the error does not reoccur.
  
  
  
  Related Information:
  
  Transaction Codes: Familiarize yourself with relevant transaction codes such as OBYZ (for tax codes), OBCO (for handling types), and OMT3E (for tax determination).
  SAP Notes: Check SAP Notes for any known issues or patches related to tax configuration and handling types.
  User Roles: Ensure that you have the necessary authorizations to make changes to tax configurations in SAP.
  
  If the issue persists after following these steps, it may be beneficial to consult with an SAP functional consultant who specializes in tax configuration for further assistance.