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Dynamics 365 Community / Forums / Microsoft Dynamics AX (Archived) / Sales tax calculation ...
Microsoft Dynamics AX (Archived)

Sales tax calculation on gross invoice amount excluding discounts AX 2012

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Posted on by Shaheryar 275

Hi, 

I have a scenario where i need to calculate sales tax on gross amount of invoice excluding discounts. For example i have an invoice of 100 having 10 as discount which is entered as total discount in Ax. When i calculate sales tax the system calculates it on 90 which is the net amount of invoice balance. No matter what i configure the system always takes the net amount of invoice balance. What i need the system to do is to calculate it on 100 which is the gross invoice balance excluding discounts. Perhaps i am missing a parameter or some other option in the system. Any help will greatly be appreciated. 

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  • Verified answer
    André Arnaud de Calavon Profile Picture
    André Arnaud de Cal... 299,403 Super User 2025 Season 2 on at
    RE: Sales tax calculation on gross invoice amount excluding discounts AX 2012

    Hi Shaheryar,

    When you use the cash discounts is it possible to setup in the Sales Tax parameters (General ledger parameters) if it is calculated including or excluding Sales Tax.

    Other discounts do not have setup for the Sales tax.

    Is it a legal requirement of your country? Perhaps you can enter the discount by using a negative miscelanious charge without Sales tax setup. It may not be the most nice solution, but can work.

  • Shaheryar Profile Picture
    Shaheryar 275 on at
    RE: Sales tax calculation on gross invoice amount excluding discounts AX 2012

    Thank you Andre,

    Yes it is a legal requirement for my country after the change in taxation law, is there another way to cater the same issue other than using negative Misc charges !

  • Verified answer
    André Arnaud de Calavon Profile Picture
    André Arnaud de Cal... 299,403 Super User 2025 Season 2 on at
    RE: Sales tax calculation on gross invoice amount excluding discounts AX 2012

    Hi Shaheryar,

    I can only think of the negative Misc charges and probably cash discount.

    It is a strange change in the law. Should you still give discounts? Or can you also lower the price on the orders? Are there some requirements about what is a price and what is discount? In my view you can easily avoid this law by changing prices?

  • Shahid Usman Profile Picture
    Shahid Usman 425 on at
    RE: Sales tax calculation on gross invoice amount excluding discounts AX 2012

    Hi ,

    Ax does not support to calculate sales tax before discounts .

    you can try this work around.

    you can change/increase your sales tax code percentage if your customers/customer group receives same discounts. the increased percentage will produce the same sales tax amounts as if they are calculated on amount before discounts.  

    Regards,

    Shahid

  • Mahdieh Farzaneh Profile Picture
    Mahdieh Farzaneh 10 on at
    RE: Sales tax calculation on gross invoice amount excluding discounts AX 2012

    Hi

    I have a problem like yours. Did you find a solution for it?

  • Suggested answer
    Shaheryar Profile Picture
    Shaheryar 275 on at
    RE: Sales tax calculation on gross invoice amount excluding discounts AX 2012

    Hi,

    I was able to bypass through the work around as suggested, I created a negative misc charge code for the Sales tax to achieve the desired result and it worked out great.

  • Mahdieh Farzaneh Profile Picture
    Mahdieh Farzaneh 10 on at
    RE: Sales tax calculation on gross invoice amount excluding discounts AX 2012
    Thanks for your reply,
    We are using misc charges to calculate our discounts (because we need to post our discounts in a saperate account)
    But about VAT, we convinced our process owners to calculate VAT after all discounts, including total discount and cash discount.

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