How to: Understand Excise Tax on Dynamics NAV 2018

Let’s know what is Excise Vat according to Investopedia.

An excise tax is an indirect tax on the sale of a particular good or service such as fuel, tobacco and alcohol. Indirect means the tax is not directly paid by an individual consumer.

As one of the customers I dealt with, He was asking How to Implement the Excise Vat on certain products on Microsoft Dynamics NAV 2018. According to the Standard NAV, There is only the Value Added Tax (VAT) that can be implemented on Microsoft Dynamics NAV 2018, So what we can do to achieve this on Microsoft Dynamics NAV?

According to the calculation of the Excise VAT, It is calculated before the Normal VAT, Let’s take an example:

In this example, We assume that we will buy 1 Item, and It’s price equal to 15 EGP.

The Excise VAT is 8% and it is calculated first on the base item price with a Value equal to 1.2 EGP.

After sum up the price and the excise vat, the total will be 16.2 EGP, Therefore the Sales VAT will be implemented as the Sales VAT in Egypt is 14% and will be calculated upon the last sum up of the following (Price + Excise VAT), So the Value of 14% will be equal to 2.268 EGP.

The total amount that the customer will pay is ( Total Before Sales VAT + Sales VAT Amount), and it is equal to 18.468 EGP.

That all lead to making the customization on Item Card to Calculate the additional VAT on the item on Sales Order or Sales Invoice.