Tax Ledger - Selecting Tax Transaction for Creating Tax Proposal Item

Hello,

This error means that tax transaction does not meet selection criteria for relevant tax proposal. 

Please check criteria for selected tax proposal (usually tax direction, period and scope of tax codes included - the tax codes included you can locate in tax report definition) and compare these with tax liability date and tax code on the transaction. 
You will receive this error e.g. trying to add WHT tax transaction to VAT tax report.