Limitations for Using Preferred Tax Codes
When you create a sales order in Legacy Tax with the Advanced Taxes feature enabled, you may sometimes get incorrect tax codes being applied to items.
This happens if you set a preferred tax code for your nexus in a particular tax schedule. The item in your sales order then automatically applies this tax code from the tax schedule, and this can cause problems if the preferred tax code is incompatible with your subsidiary.
For example, you create a sales order for a customer, using a French nexus. When you enter your item name on the Items subtab, you get a suggested tax code for this item in the Item column. You get the VAT:TC for FRA_Sub tax code instead of the VAT:UNDEF-FR tax code because the VAT:TC for FRA_Sub is set a preferred tax code in your tax schedule.
To rectify this error, either:
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Manually select the correct tax code from the Tax Code list
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To avoid the inheritance of the preferred tax code from your tax schedule, go to Setup > Accounting > Taxes > Tax Schedules > Edit the tax schedule used for the item. Click your nexus and set the sales tax code to empty.
If the EU One Stop Shop (OSS) feature is enabled on your account, this error is persistent.