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Dynamics 365 Community / Forums / Small and medium business | Business Central, N... / Sales Tax on Sales Ret...
Small and medium business | Business Central, N...
Answered

Sales Tax on Sales Return Orders

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Posted on by Greg Kujawa 583
Using BC 265 SaaS v25.5. So prior to April 1, 2025 our state had a 7.5% sales tax rate. After that it's a 8% sales tax rate. We have found when a customer bring an item back in for refund, if it was purchased prior to April 1, 2025 the refund is recalculating the sales tax on the sales return order at 8%. Over-refunding the customer. 
 
Any suggestions about resolving this issue? We have tried to test out modifying the Posting Date for the sales return order, but when the document is posting it is still looking at current Work Date and essentially over-refunding the customer....
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Dynamics 365 Business Central
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  • Verified answer
    Greg Kujawa Profile Picture
    Greg Kujawa 583 on at
    Stumbled upon the Statistics page, which allows the user to manually override the calculated sales tax for the sales return order. This worked for properly refunding the correct sales tax amount. It's a shame that base BC behavior recalculates sales tax based on the Posting Date value when it comes to refunding. When there are inevitable sales tax increases then this is definitely a gap.
  • Suggested answer
    YUN ZHU Profile Picture
    YUN ZHU 95,729 Super User 2025 Season 2 on at
    Hi, hope the following can give you some hints.
    How to adjust the VAT amount in Dynamics 365 Business Central (VAT Difference)
    https://yzhums.com/2056/
     
    Thanks.
    ZHU
  • Suggested answer
    Khushbu Rajvi. Profile Picture
    Khushbu Rajvi. 20,601 Super User 2025 Season 2 on at
    The issue arises because Business Central recalculates sales tax based on the posting date for sales return orders, which can lead to over-refunding when tax rates change. A workaround is to manually override the tax using the Statistics page, but this isn't ideal for long-term use. Ideally, the system should calculate tax based on the original transaction date, and you may consider raising this issue with Microsoft or exploring customizations to automate the process.
     

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