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BC Sales Order VAT Error for some select customers with CRM Integration

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Hello,

I am encountering a persistent and frustrating VAT posting error in Dynamics 365 Business Central (SaaS, v26.4), preventing a sales order, synchronized from an external CRM system, from posting. This is happening for an existing EU customer that we have successfully invoiced previously without issue in the past and no recent changes have been made to our VAT setup.

We are running Dynamics 365 Business Central (SaaS, v26.4.x) with a tight integration to CRM (D365CE Sales)

All order generated from a particular country are stuck in the sales order posting queue whilst others from other locations go through without issues.

Here is the Error Message:

VAT Calculation Type must be equal to 'Reverse Charge VAT' in VAT Posting Setup: VAT Bus. Posting Group=EU-REG, VAT Prod. Posting Group=. Current value is 'Normal VAT'.
The call stack confirms the error is triggered by standard BC validation (Sales Line."No. - OnValidate") after the custom integration code runs:

AL Call Stack (Abbreviated)
[Custom Integration CodeUnit].InitializeSalesOrderLineFromItem
"Sales Line"(Table 37)."No. - OnValidate"(Trigger)

We made not changes to the vat setup which is odd and we cannot change VAT Setup as the error implies.

Can anyone advise why did this transaction suddenly begin to fail when previous, identical orders posted correctly using one of the other, correctly configured EU groups?

Thank you for any insight!

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Dynamics 365 Business Central

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Rishabh Kanaskar 5,466 on at

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BC Sales Order VAT Error for some select customers with CRM Integration

Hi,

The error occurs because BC validates the combination of VAT Business Posting Group and VAT Product Posting Group against the VAT Posting Setup at the time of posting. Even if nothing changed in your setup, a few scenarios can trigger this for some customers:
> The customer’s VAT Bus. Posting Group was changed, or the integration is sending an incorrect or missing VAT group for that specific country.
> The item or product being sold has a VAT Prod. Posting Group that does not match the expected setup (e.g., “Normal VAT” instead of “Reverse Charge VAT”).
> The CRM integration is mapping fields differently for this customer or country, overriding the correct VAT setup.

Resolution steps:
> Verify the customer’s VAT Business Posting Group in BC.
> Check the item’s VAT Product Posting Group.
> Review the VAT Posting Setup for the EU-REG group and ensure “Reverse Charge VAT” is defined correctly.
> Check the integration mapping for that country/customer to ensure the correct VAT groups are being passed.

This is not a bug but a data mismatch; correcting either the customer, item, or integration mapping resolves the posting error.

Thanks

Rishabh

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MariusTeleman_VGR 42 on at

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BC Sales Order VAT Error for some select customers with CRM Integration

Hello,

Standard BC needs Vat Bus. Posting group + Vat Prod. Posting group to validate the correct VAT approach.

For a standard sales document, the VAT Bus. Posting group comes from the header (customer) and the Vat Prod. Posting group from the lines.

In your case no VAT prod. Posting Group is being validated on the lines.

Potential causes:

Item used is missing on item card the VAT Prod. Posting Group - case in which adding the missing setup on item and trying again should solve it

There is a development that interferes in how standard validations are done and item is being added, reset, and the posting crashes for missing setup.

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Gregory Mavrogeorgis 503 on at

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BC Sales Order VAT Error for some select customers with CRM Integration

Hi,

Looks like BC think this order should be Reverse Charge VAT, but your VAT Posting Setup row for (EU-REG, <blank VAT Prod. Posting Group>) is set to Normal VAT. So when the line validates (Sales Line."No." OnValidate), it blows up.

Most likely the VAT Prod. Posting Group on the sales line is blank for that country’s orders. Other countries get a proper product group (GOODS/SERVICES etc.), so they hit a different posting setup row that is fine. If integration (CRM → BC) started leaving it blank or overwriting it, you’ll see exactly this error. v26.4 also feels a bit stricter, so it surfaces faster.
Quick checks (do these first):

Open one failing Sales Line: confirm VAT Bus. Posting Group = EU-REG and VAT Prod. Posting Group = <blank>.

Open VAT Posting Setup: find row (EU-REG, <blank>). What’s VAT Calculation Type? (probably Normal VAT)

On Customer: VAT Reg. No. present? Country correct? Bus. Posting Group = EU-REG?

On Item/G/L/Resource: does it have a VAT Prod. Posting Group? Is the integration copying it or wiping it?

Try same customer + item manually in BC:

If manual works → your integration code is the culprit (clearing VAT fields).

If manual fails → your setup need change.

Should be Reverse Charge:
Don’t leave product group blank. Map the right VAT Prod. Posting Group on the line (e.g. SERV-EU) and configure that (EU-REG, SERV-EU) row to Reverse Charge VAT. Avoid making (EU-REG, <blank>) Reverse Charge unless you really want all blanks to be RC (usually no).

Should be Normal VAT:
Then something in header/partner data makes BC think RC applies (EU B2B with VAT Reg. No., country combo, etc.). Fix Bus. Posting Group or customer’s VAT status so it doesn’t pick RC logic.

Integration leaving it blank (most common):
In your codeunit after InitializeSalesOrderLineFromItem, don’t overwrite VAT Prod. Posting Group. If it’s empty, set it from the item or your country/product mapping. If still empty, throw a clearer error before standard validation, so you know exactly why.

Helpful tools:

Run “VAT Posting Setup – Test” to catch weird combos.

Debug Sales Line."No." OnValidate and watch which Posting Setup row BC picks.

Compare one good order vs the bad one field-by-field (VAT groups, customer VAT Reg. No., country, item VAT Prod. group).

If you find this helful please mark it as veridied

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Pallavi Phade 2,627 on at

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BC Sales Order VAT Error for some select customers with CRM Integration

Namaste @Community member

Check Setup - VAT Posting Setup . Combination of Both Vat Business and VAT Prod posting Group .

If its correct ,

Check Sales Line pushed from CRM , Feild "Vat Calcualation Type " . This feild exist in sales Line .

Fixing the issue

Try to Enter the same gl or Item manually , if you face no issue , then AL developer or CRM developer need to take care of this

If you feel this helped, Please mark as "Verified"

Regards

Pallavi Phade

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YUN ZHU 93,793 Super User 2025 Season 2 on at

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BC Sales Order VAT Error for some select customers with CRM Integration

Is there any change in the master data? You can check if the VAT Posting Group of some synchronized orders is different from the previous one.

Hope this helps.

Thanks.

ZHU

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