Hello,
Because the original invoice is already paid, Business Central does not allow you to simply Correct/Cancel it; Microsoft recommends using a Sales Credit Memo. For the cleanest standard audit trail, I would fully credit the original invoice so the original sales tax is reversed, update the customer as tax-exempt, then create a replacement sales invoice for the same sale without sales tax; apply the credit memo against the replacement invoice, which leaves an open customer credit equal only to the tax amount. Finally, use Payment Journal → Document Type = Refund → Account Type = Customer, apply it to that remaining credit, and print/post the refund check. This keeps the sale recognized while reducing the reported sales tax collected correctly. Note that credit/rebill will create reversing/replacement item entries; if you specifically need no inventory ledger movement at all, I would have your accountant/BC partner design a tax-only G/L/tax adjustment rather than manually posting directly to the tax account, because Microsoft does not provide a dedicated one-click “refund sales tax only” process.
Regards,
Oussama Sabbouh
