diff --git a/src/libs/actions/IOU.ts b/src/libs/actions/IOU.ts
index bdf6ca823369..cb770bf98c1b 100644
--- a/src/libs/actions/IOU.ts
+++ b/src/libs/actions/IOU.ts
@@ -5092,6 +5092,7 @@ type UpdateMoneyRequestAmountAndCurrencyParams = {
     policy?: OnyxEntry<OnyxTypes.Policy>;
     policyTagList?: OnyxEntry<OnyxTypes.PolicyTagList>;
     policyCategories?: OnyxEntry<OnyxTypes.PolicyCategories>;
+    taxCode: string;
 };
 
 /** Updates the amount and currency fields of an expense */
@@ -5104,11 +5105,13 @@ function updateMoneyRequestAmountAndCurrency({
     policy,
     policyTagList,
     policyCategories,
+    taxCode,
 }: UpdateMoneyRequestAmountAndCurrencyParams) {
     const transactionChanges = {
         amount,
         currency,
         ...(taxAmount && {taxAmount}),
+        taxCode,
     };
     const transactionThreadReport = allReports?.[`${ONYXKEYS.COLLECTION.REPORT}${transactionThreadReportID}`] ?? null;
     const parentReport = allReports?.[`${ONYXKEYS.COLLECTION.REPORT}${transactionThreadReport?.parentReportID}`] ?? null;
diff --git a/src/pages/iou/request/step/IOURequestStepAmount.tsx b/src/pages/iou/request/step/IOURequestStepAmount.tsx
index b320766edd7a..c0f4349506fc 100644
--- a/src/pages/iou/request/step/IOURequestStepAmount.tsx
+++ b/src/pages/iou/request/step/IOURequestStepAmount.tsx
@@ -56,12 +56,12 @@ type IOURequestStepAmountProps = IOURequestStepAmountOnyxProps &
         transaction: OnyxEntry<OnyxTypes.Transaction>;
     };
 
-function getTaxAmount(transaction: OnyxEntry<OnyxTypes.Transaction>, policy: OnyxEntry<OnyxTypes.Policy>, newAmount: number) {
+function getTaxAmount(transaction: OnyxEntry<OnyxTypes.Transaction>, policy: OnyxEntry<OnyxTypes.Policy>, newAmount: number, currency: string) {
     if (!transaction?.amount) {
         return;
     }
     const transactionTaxCode = transaction?.taxCode ?? '';
-    const defaultTaxCode = TransactionUtils.getDefaultTaxCode(policy, transaction) ?? '';
+    const defaultTaxCode = TransactionUtils.getDefaultTaxCode(policy, transaction, currency) ?? '';
     const taxPercentage = TransactionUtils.getTaxValue(policy, transaction, transactionTaxCode ?? defaultTaxCode) ?? '';
     return CurrencyUtils.convertToBackendAmount(TransactionUtils.calculateTaxAmount(taxPercentage, newAmount));
 }
@@ -290,9 +290,10 @@ function IOURequestStepAmount({
             return;
         }
 
-        const taxAmount = getTaxAmount(transaction, policy, newAmount);
+        const taxAmount = getTaxAmount(transaction, policy, newAmount, currency);
+        const taxCode = TransactionUtils.getDefaultTaxCode(policy, transaction, currency) ?? '';
 
-        IOU.updateMoneyRequestAmountAndCurrency({transactionID, transactionThreadReportID: reportID, currency, amount: newAmount, taxAmount});
+        IOU.updateMoneyRequestAmountAndCurrency({transactionID, transactionThreadReportID: reportID, currency, amount: newAmount, taxAmount, taxCode});
         Navigation.dismissModal();
     };