Dynamics Community Forum Thread Details

Purchase Credit Memos “Prices Including VAT” → Inconsistency (Gen. Jnl. Post Line)

Hi everyone,

we are seeing a reproducible issue in Business Central related to automatic Non‑Deductible VAT calculation, even though the affected VAT Posting Setup does not define any Non-Deductible VAT percentage.

Scenario

VAT Posting Setup has standard deductible 20% VAT configuration
A Purchase Credit Memo ( Prices Including VAT = Yes) contains a negative line (we noted this issue is only related to Prices Including VAT = Yes not appearing with Prices Including VAT = No)
Business Central automatically calculates a non‑deductible VAT portion, even though the VAT posting combination is not configured for non-deductibility
During posting, BC produces an Inconsistency in Gen. Jnl. Post Line
because VAT account is not posted while liability account includes goss value (VAT included)

Why we think this is incorrect

The VAT Posting Setup does not contain any non‑deductible VAT settings
Therefore BC should not classify any part of the VAT as non‑deductible
However, BC automatically splits VAT when:
1. Prices Including VAT = Yes
2. A negative line exists → even if the VAT matrix does not declare the VAT as non‑deductible

Questions

Is this behaviour known to anyone?
Is this expected, or is it a bug in the VAT calculation logic?
Why does BC calculate a non‑deductible VAT portion when the VAT Posting Setup is not configured for tha

Thanks!

Categories:

Dynamics 365 Business Central

Hello,

If Non-Deductible VAT is not enabled in VAT Setup and the VAT Posting Setup combination is not marked Allow Non-Deductible VAT with a defined percentage, Business Central should not split VAT at all, so what you’re describing (automatic non-deductible portion only when Prices Including VAT = Yes and a negative line exists) does not align with the documented design of the feature and looks more like a VAT calculation edge case related to inclusive VAT + negative amounts rather than intended non-deductible logic; first confirm that Enable Non-Deductible VAT is off and the posting setup line is set to Do Not Allow (and that no localization like BE/CZ injects percentage logic at G/L or product posting group level), and if all that is clean, this behavior—especially since it causes a Gen. Jnl. Post Line inconsistency—strongly points to a bug and should be logged with a minimal reproducible case to Microsoft.

Regards,
Oussama Sabbouh

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