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Dynamics 365 Community / Forums / Small and medium business | Business Central, N... / Receiving a VAT Tax Error
Small and medium business | Business Central, N...
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Receiving a VAT Tax Error

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Posted on by LB_Pgh 265

My customer does not do VAT taxing. They are US only.

Here is the sequence of events

1) Order with multiple lines entered

2) Customer is 100% prepaid

3) Prepayment invoice is posted

4) Prepaid invoice is paid

5) Nothing shipped or invoiced

6) Prepayment credit memo is posted

7) Quantity for 1 line is set to Zero

8) Attempt to post new prepayment invoice

9) Receive an error message - The Prepayment account is assigned to a VAT product posting group where the VAT percentage is not equal to zero. This can cause posting errors when invoices have mixed VAT lines. To avoid errors, set the VAT percentage for zero to the account. 


We did not get this error in the past. None of the GL accounts have a VAT product posting group. 

VAT should not even be considered.

Also, with this particular sales order, it is not even taxable for sales taxable


Any help/thoughts appreciated

Categories:
Business Central
Business Central
  • Suggested answer
    DAnny3211 Profile Picture
    DAnny3211 9,272 Super User 2024 Season 1 on at
    RE: Receiving a VAT Tax Error

    hi

    It sounds like the issue you're experiencing is related to the VAT product posting group that is assigned to the Prepayment account in Microsoft Dynamics 365 Business Central.

    To resolve the issue, you can try the following steps:

    Navigate to the Prepayment account in Business Central.

    Open the "VAT Posting Setup" page for the Prepayment account.

    Check if a VAT product posting group is assigned to the Prepayment account.

    If a VAT product posting group is assigned, make sure that the VAT percentage is set to zero for that product posting group.

    If no VAT product posting group is assigned, try clearing any values in the "VAT Product Posting Group" field.

    Save the changes to the Prepayment account.

    By setting the VAT percentage to zero for the product posting group assigned to the Prepayment account, you should be able to avoid the error message when attempting to post the new prepayment invoice.

    If the issue persists, it may be helpful to review your sales tax setup in Business Central to ensure that sales tax is not being applied incorrectly to this particular sales order.

    DAniele

  • Suggested answer
    Marco Mels Profile Picture
    Marco Mels on at
    RE: Receiving a VAT Tax Error

    Hello,

    In CU5 for 21.x and CU11 for 20.x there is a fix available related to this error. It may help you as well. The issue can also occur if the prepayment amount is higher than the document amount. Under rare conditions, the error you saw is wrong and should be "Prepayment amount must not be higher than the document amount."

    If this does not resolve the issue, please raise it to support with a crisp repro scenario in standard CRONUS company. The supporter will ask for it.

    Thank you.

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