When setting up Microsoft Dynamics AX 2012, you can specify if Tax exempt numbers (aka VAT number) should be mandatory on the master data of customers or vendors. This is a common requirement for countries in the European Union to ensure correct reporting on foreign trade. With a specific setup, also for e.g. Japanese customers the VAT number is mandatory. This post will guide you how to solve and prevent this error for customers outside the European Union.
I will first explain the problem in detail before telling the solution(s). It is possible to check for mandatory VAT numbers on several levels: None, Domestic + EU member states and EU member states. This setting can be found on the parameters form for Accounts Payable and Accounts Receivable. In this post I will continue on the customers’ part, but it also applies to the vendor side. Let’s start with the Accounts receivable parameters:
When the Tax exempt number requirement is set to Domestic + EU member states, you inform AX to check for having the VAT number filled at all domestic customers and the customers in the European Union. In this scenario I used the demonstration data with a German company.
Entering new customers seems to work until you enter the first customer from a country which does not belong to the European Union. Let’s assume we add a customer in Japan.
Now click the button Save and close, you will get the next error which is incorrect.
At first you would think to look into the Country/Region table which is included in the form Address setup. This table is as of version AX 2012 globally shared and filled during the installation. When you look at prior versions of Microsoft Dynamics AX, the country/regions were setup per company by default. Then the country regions contained also a field to indicate if the country was e.g. domestic or part of the European Union. As the domestic country can be different per legal entity, the globally shared table is not suitable anymore for storing this information.
The setting for defining the domestic and EU members can now be found in the form Foreign trade parameters. This form is located in Organization administration, Setup, Foreign trade
The Country/region properties tab contains the section to setup the country type. To solve the issue add Japan (or your countries) in this list and select the correct Country/region type. When the record is missing it thinks it is Domestic.
I would like to add some additional notes on this post.
For the scenario where there is no Country/region parameter for a certain country, I think a certain setup parameter to indicate if you want to allow a missing setup, provide a warning or block with an error would provide additional value in this functional area.
That’s all for now. Till next time!