The system has 3 methods for automatically selecting a tax code during document creation time.
the auto selection of tax code impacts on new documents, editing or duplicate existing document the auto selection has a different impact.
Please take note that if you duplicate an existing document it will use the setting on that document.
eg if tax code is 7% on the duplicated document ,the new document will also use the 7% tax code
1. BP default.
this method is where the default tax code is specified at the BP level.
when the document is new the first line item will follow the setting of the BP.
note this method can be overridden by the 2 & 3 methods.
setup -> customer/vendor ->Business partner
2. Default settings method (only applies to Sales invoice document)
the default setting method forces the selected tax code be used.
this method be changed by the user manually selecting a new tax code during the document creation.
this method will overwrite the settings of 1 & 3.
setup -> Company details -> Default settings -> others
3. copy down method
the system has a built in function that copies the tax setting from the line item above it.
when you add a new line item the system will automatically check the line above for the tax setting and use that.
this method is used in conjunction with method 1.
method 1 sets the first line item tax code. the subsequent line items follow the line above.
note method 2 will override this method
please note that if you manually change the tax code of a line item in the document, the next line item will use the tax setting of the above line.