diff --git a/restws.formats.inc b/restws.formats.inc
index a6f588f..4550bc0 100644
--- a/restws.formats.inc
+++ b/restws.formats.inc
@@ -531,8 +531,8 @@ class RestWSFormatXML extends RestWSBaseFormat {
    */
   public function xmlToArray($properties, SimpleXMLElement $xml, $listItemType = NULL) {
     foreach ($xml->children() as $name => $element) {
-      // Check if isset type or we are processing a list.
-      if (isset($properties[$name]['type']) || isset($listItemType)) {
+      // Check if the we are processing an entity, an item from a list or a list.
+      if ((isset($properties[$name]['type']) && (entity_property_list_extract_type($properties[$name]['type']) || entity_get_info($properties[$name]['type'])))  || isset($listItemType)) {
         // If we are processing a list, then set the type of the list and save
         // the results into a a numeric array.
         if (isset($listItemType)) {
diff --git a/restws.test b/restws.test
index 82645fe..036a9b5 100644
--- a/restws.test
+++ b/restws.test
@@ -135,10 +135,28 @@ class RestWSTestCase extends DrupalWebTestCase {
     $this->assertEqual($node->field_tags[LANGUAGE_NONE][1]['tid'], 1, 'Taxonomy term 2 was correctly added.');
 
     // Test XML update.
-    $xml = '<node><field_tags><item resource="taxonomy_term" id="1">' . restws_resource_uri('taxonomy_term', 1) . '</item></field_tags><title>bar</title></node>';
+    $xml = '
+      <node>
+        <title>bar</title>
+        <type>article</type>
+        <author resource="user" id="1">' . restws_resource_uri('user', 1) . '</author>
+        <field_tags>
+          <item resource="taxonomy_term" id="1">' . restws_resource_uri('taxonomy_term', 1) . '</item>
+          <item resource="taxonomy_term" id="2">' . restws_resource_uri('taxonomy_term', 2) . '</item>
+        </field_tags>
+      </node>';
     $result = $this->httpRequest('node/' . $nid, 'PUT', $account, $xml, 'xml');
     $node = node_load($nid, NULL, TRUE);
     $this->assertEqual($node->field_tags[LANGUAGE_NONE][0]['tid'], 1, 'Taxonomy term 1 was correctly updated.');
+    $this->assertEqual($node->field_tags[LANGUAGE_NONE][1]['tid'], 2, 'Taxonomy term 2 was correctly updated.');
+
+    // Test XML create.
+    $result = $this->httpRequest('node', 'POST', $account, $xml, 'xml');
+    $xml_element = simplexml_load_string($result);
+    $nid = $xml_element->attributes()->id;
+    $node = node_load((int) $nid, NULL, TRUE);
+    $this->assertEqual($node->field_tags[LANGUAGE_NONE][0]['tid'], 1, 'Taxonomy term 1 was correctly added.');
+    $this->assertEqual($node->field_tags[LANGUAGE_NONE][1]['tid'], 2, 'Taxonomy term 2 was correctly added.');
   }
 
   /**