Sales Discount & Sales Tax: How to exclude discount from calculated tax?

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We are faced with a situation where we need to omit the discount given to certain products from being included in the tax calculations. Example:

- we have a product with a sale price of 100

- the tax is 13%

- we want to give the customer a 10% discount, but we have to maintain the 13% tax amount

what we managed to find in the system is that any discount given on the item line will affect the tax calculated. Some suggested to put the tax on the sales order rather than the item line, but we need to be able to know which items were sold with discount.

So, our scenarios that we are looking for (from best to least working) are as follows:

1. a setup that will allow us to give discounts on certain products (on the line level) without affecting the tax

2. a setup that will allow us to give a discount on the entire sales order but will distribute the discount amount on the items (some sort of linking the discount to the items - and apologies for me not being accounting savvy, i am yet to take my AX Financial courses!!!)

3. a setup that will allow us to add the discount on the sales order and without affecting the tax amount imposed on the item's original price

Note: we are not using any retail modules and all sales are done through the Accounts Receivable - Sales Orders

Help is very much appreciated!

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Ludwig Reinhard Microsoft Employee on at

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Hi,

For 1 and 3:

How did you setup your sales tax codes? What have you setup in the calculation tab for the origin, marginal base and calculation method? Have you tried modifying those setups?

For 2:

Do you make use of total / line / multiline discounts that can be setup at the SO header level? Have you already set them up or tried setting them up?

Best regards,

Ludwig

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Community Member on at

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Sales tax is setup as follows (and we have tried different combinations):

Origin: Percent of net amount (and we have also gross)

Marginal: Net amount of invoice (and we have tried net amount per line and gross per line)

Calc method: Whole amount

all of these, any discount put on the line level, affects the tax calculated

We have not tried the discounts on the header level

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Community Member on at

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We ended up setting up the discounts as charges which are linked to specific accounts in the chart of accounts so that they affect the cost price of the sold / purchased items.

I will update this post with the exact details of our setup.

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Community Member on at

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HI,

We go the same requirement where we are using AX POS at retail outlets, where we have to distribute the discounted amount to all Items evenly. As of now it seems that it requires some customization. Wondering if this thing available in any updates.

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Eduardo Yambao 5 on at

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Got the same issue. Need to to exclude calculation of discount from calculated tax.

Did you found solution?

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Ludwig Reinhard Microsoft Employee on at

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Hi Eduardo

Is that a common business practice and in line with the tax rules in your country to have sales tax calculated on the amount before discounts? is that a cash discount? can you possibly provide some additional information on that? thanks

ludwig

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