Tax code & is not valid for customer receivables. Enter output tax code.

What causes this issue?

Tax code &V1& is not relevant for calculating taxes on customer
receivables.

System Response

The system checks table T007A to determine the tax type. Tax code &V1&
has tax type &V2& which is used for payables (input tax code).

How to fix this error?

Select a tax code that is used for Output tax. Tax type 'A'.

Error message extract from SAP system. Copyright SAP SE.