[$250] [Exploratory] - Expense - No system message about tax rate after change currency in expense

[applause-bot]

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Version Number: v9.3.80-0
Reproducible in staging?: Yes
Reproducible in production?: Yes
If this was caught during regression testing, add the test name, ID and link from BrowserStack: https://test-management.browserstack.com/projects/2219752/test-runs/TR-32728/folder/13176868/41237330/1434928131
Email or phone of affected tester (no customers): leungbratt6+2305@gmail.com
Issue reported by: Applause Internal Team
Bug source: Exploratory - Significant User Experience Deterioration
Device used: Windows 10/Chrome
App Component: Chat Report View

Action Performed:

Precondition: Workspace has enabled taxes

1. Open the NewDot app
2. Create a manual expense with a non-zero tax rate (5%..)
3. Click on the expense and change the currency

Expected Result:

A system message is added to the report if the tax rate changes or the current tax rate should remain

Actual Result:

No system message, and the tax rate has changed to 0.00

Workaround:

Unknown

Platforms:

• Android: App
• Android: mWeb Chrome
• iOS: App
• iOS: mWeb Safari
• iOS: mWeb Chrome
• Windows: Chrome
• MacOS: Chrome Safari

Screenshots/Videos

Bug7161090_1779512565895.taxe.mp4

View all open jobs on GitHub

Applause Internal Information
Exported by: Mita Rachim
Bug ID: 7161090

Upwork Automation - Do Not Edit

• Upwork Job URL: https://www.upwork.com/jobs/~022077910281609391985
• Upwork Job ID: 2077910281609391985
• Last Price Increase: 2026-07-24

[applause-bot]

While Applause doesn't embed attachments for this bug, here are the links for quick view:
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[MelvinBot]

Proposal

Problem

When an expense with a non-zero tax rate has its currency changed (on a tax-enabled workspace), two things happen that the tester flagged as wrong:

1. The tax rate silently drops to 0.00.
2. No system message is posted to the report about the tax change.

Per the issue's Expected Result, one of these should hold: either the tax rate is preserved, or a system message documents the change. Today neither happens — the rate resets to 0 with no trace.

Root Cause

Both behaviors are intentional in the current code, which is why this is really a product decision rather than a plain bug.

1. Tax rate → 0 is a deliberate recalculation, not a blanking bug. On a currency edit, the tax code is intentionally replaced with the workspace default for the new currency (foreignTaxDefault for a foreign currency, defaultExternalID when it matches the workspace output currency). The user's manually-chosen 5% rate is discarded. Since foreignTaxDefault typically resolves to a 0% rate, the displayed rate becomes 0.00.

2. The missing system message is also deliberate. getModifiedExpenseOriginalMessage explicitly suppresses the tax-rate/tax-amount fields whenever amount or currency also changed in the same edit. A currency edit always bundles amount + currency + taxCode + taxAmount into one change set, so the guard is always tripped and the tax change never reaches the report action. The inline comment states this was intentional: "Tax rate can change as a result of currency update. In such cases, we want to skip displaying a system message, as discussed."

Code evidence (SHA 2f231c6)

• Tax code intentionally reset on currency change: src/libs/IOUAmountSubmission.ts:552-557
• Default tax code chosen (foreignTaxDefault for foreign currency): src/libs/TransactionUtils/index.ts:2287-2288
• Currency edit bundles amount+currency+tax into one change set: src/libs/actions/IOU/UpdateMoneyRequest.ts:1387-1393
• System-message suppression guard: src/libs/ReportUtils.ts:5920-5934

Solution

The expected behavior in the issue ("a system message is added if the tax rate changes, or the current tax rate should remain") is satisfied by surfacing the change. The most targeted fix:

Relax the suppression guard in getModifiedExpenseOriginalMessage so that when the tax code/amount genuinely changes as a byproduct of a currency edit, the oldTaxRate/taxRate (and oldTaxAmount/taxAmount) fields are still added to the modified-expense report action. ModifiedExpenseMessage.ts already renders these fragments when present, so no rendering work is needed — only the fields need to reach the action.

⚠️ Because the current suppression was added deliberately ("as discussed"), this needs product sign-off before implementing — it reverses a prior decision. It's worth confirming with the team whether the desired outcome is (a) show a tax-change system message, or (b) preserve the user's tax rate across currency changes instead of resetting it.

Related issues

• [Due for payment 2026-08-03] [$375] Tax-Tax rate is not updated on the confirmation page after changing currency #93772 — Tax rate not updated on confirmation page after changing currency (same area).
• Expense - Duplicated tax rate appears after changing expense currency on different workspace #86222 — Duplicated tax rate after changing expense currency on a different workspace.

Confidence: Code evidence is High; the fix is Medium confidence because it reverses intentional behavior and needs a product decision.

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Next Steps for Contributor+ team:
To accept: @MelvinBot implement [this](https://github.com/Expensify/App/issues/91564) to create a draft PR.
To refine: @MelvinBot <your feedback>
To reject: Explain why you are rejecting Melvin's proposal.

[melvin-bot]

Triggered auto assignment to Contributor-plus team member for initial proposal review - @thesahindia (External)

[wildan-m]

Proposal

Please re-state the problem that we are trying to solve in this issue.

When editing an expense that has a non-zero tax rate (e.g. 5%) on a workspace with taxes enabled, changing the expense currency silently resets the tax rate to 0.00 and no system message is added to the report explaining the change. The user is left unaware that their tax was removed.

What is the root cause of that problem?

There are two parts working together.

1. Changing the currency on an edit recomputes the tax. In IOURequestStepAmount, when the selected currency differs from the transaction currency, the tax code is intentionally switched to the policy's default tax code for that currency (getDefaultTaxCode, which returns foreignTaxDefault for a foreign currency). When the workspace's foreign-currency default resolves to a 0% / tax-exempt rate, the tax drops to 0.00:

App/src/pages/iou/request/step/IOURequestStepAmount.tsx

Lines 473 to 478 in de3e3bf

	// If currency has changed, then we get the default tax rate based on currency, otherwise we use the current tax rate selected in transaction, if we have it.
	const transactionTaxCode = getTransactionDetails(currentTransaction)?.taxCode;
	const defaultTaxCode = getDefaultTaxCode(policy, currentTransaction, selectedCurrency) ?? '';
	const taxCode = (selectedCurrency !== transactionCurrency ? defaultTaxCode : transactionTaxCode) ?? defaultTaxCode;
	const taxPercentage = getTaxValue(policy, currentTransaction, taxCode) ?? '';
	const taxAmount = convertToBackendAmount(calculateTaxAmount(taxPercentage, newAmount, decimals));

2. The system message that records the edit deliberately omits the tax-rate change whenever the amount or currency also changed. In getModifiedExpenseOriginalMessage, the block that populates oldTaxRate/taxRate is gated by didTaxCodeChange && !didAmountOrCurrencyChange, so on a currency change that switches the tax code, the tax-rate change is excluded from the modified-expense report action:

App/src/libs/ReportUtils.ts

Lines 5592 to 5598 in de3e3bf

	// We only want to display a tax rate update system message when tax rate is updated by user.
	// Tax rate can change as a result of currency update. In such cases, we want to skip displaying a system message, as discussed.
	const didTaxCodeChange = 'taxCode' in transactionChanges;
	if (didTaxCodeChange && !didAmountOrCurrencyChange) {
	originalMessage.oldTaxRate = policy?.taxRates?.taxes[getTaxCode(oldTransaction)]?.value;
	originalMessage.taxRate = transactionChanges?.taxCode && policy?.taxRates?.taxes[transactionChanges?.taxCode]?.value;
	}

The tax amount change is suppressed the same way for the amount/currency case:

App/src/libs/ReportUtils.ts

Lines 5600 to 5605 in de3e3bf

	// We only want to display a tax amount update system message when tax amount is updated by user.
	// Tax amount can change as a result of amount, currency or tax rate update. In such cases, we want to skip displaying a system message, as discussed.
	if ('taxAmount' in transactionChanges && !(didAmountOrCurrencyChange || didTaxCodeChange)) {
	originalMessage.oldTaxAmount = getTaxAmount(oldTransaction, isFromExpenseReport);
	originalMessage.taxAmount = transactionChanges?.taxAmount;
	originalMessage.currency = getCurrency(oldTransaction);

The !didAmountOrCurrencyChange guard was meant to avoid a redundant tax message when the tax amount merely recalculates at the same rate because the expense amount changed. But it over-suppresses: when a currency change actually switches the tax code (e.g. 5% → 0%), that is a meaningful change, and hiding it from the report is exactly the reported deterioration — the user only sees an amount-change message and nothing telling them their tax rate was reset.

What changes do you think we should make in order to solve the problem?

In getModifiedExpenseOriginalMessage (src/libs/ReportUtils.ts), stop suppressing the tax-rate change when the currency/amount changes if the tax code genuinely changed. Concretely, populate originalMessage.oldTaxRate and originalMessage.taxRate when taxCode is present in transactionChanges and the new tax code differs from the old transaction's tax code (getTaxCode(oldTransaction)), regardless of whether amount/currency also changed. Keep the existing behavior (no tax-rate message) when the tax code is unchanged, so a pure amount edit at the same rate still does not emit a redundant tax message.

This makes the modified-expense system message reflect the tax-rate change that the currency edit caused — matching the issue's expected result "A system message is added to the report if the tax rate changes." The downstream renderer in ModifiedExpenseMessage.getForReportAction already knows how to render oldTaxRate/taxRate, so once these fields are present the message is produced automatically:

App/src/libs/ModifiedExpenseMessage.ts

Lines 418 to 426 in de3e3bf

	const hasModifiedTaxRate = isReportActionOriginalMessageAnObject && 'oldTaxRate' in reportActionOriginalMessage && 'taxRate' in reportActionOriginalMessage;
	if (hasModifiedTaxRate) {
	buildMessageFragmentForValue(
	translate,
	reportActionOriginalMessage?.taxRate ?? '',
	reportActionOriginalMessage?.oldTaxRate ?? '',
	translate('iou.taxRate'),
	false,
	setFragments,

No change is needed in IOURequestStepAmount — applying the foreign-currency default tax on a currency change is existing intended behavior; the missing piece is surfacing that change to the user via the system message.

Compare branch: https://github.com/Expensify/App/compare/main...wildan-m:App:wildan/91564-tax-rate-system-message-on-currency-change?expand=1

What alternative solutions did you explore? (Optional)

Preserving the user's existing tax rate when the currency changes (so the rate "remains", the other branch of the expected result) was considered, but that reverses the intentional foreign-currency-default behavior added for the create/edit flow and would change tax computation for everyone, so adding the missing system message is the lower-risk, more targeted fix.