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Small and medium business | Business Central, N...
Suggested answer

Incorrect Region Setup Leading to VAT Instead of Sales Tax

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I recently set up a customer’s company in the wrong region, which caused VAT to be applied instead of Sales Tax. This mismatch is not compatible with the customer’s needs. I tried changing the application area, and while that removed VAT from the interface, Sales Tax is still not being applied to sales lines, and VAT tables remain visible.

 

I’m considering creating a new environment in the correct region to resolve this. However, I’m unsure about how to transfer the company data from the incorrect region environment to the new one. Any suggestions on the best way to handle this transition?

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  • Suggested answer
    Khushbu Rajvi. Profile Picture
    18,797 Super User 2025 Season 2 on at
    Incorrect Region Setup Leading to VAT Instead of Sales Tax
  • Gerardo Rentería García Profile Picture
    22,524 Most Valuable Professional on at
    Incorrect Region Setup Leading to VAT Instead of Sales Tax

    Hi, good day
    I hope this can help you, and give you some hints.

    Dynamics 365 Business Central Blog Series: Import and Export data | Dynamics 365 Lab

    Best Regards
    Gerardo

  • Verified answer
    Sohail Ahmed Profile Picture
    10,969 Super User 2025 Season 2 on at
    Incorrect Region Setup Leading to VAT Instead of Sales Tax
    Maybe this will help you move forward.
     
    Yes, creating a new environment in the correct region (e.g., U.S. for Sales Tax vs. EU for VAT) is the right approach, since localization is region-based and can’t be fully changed after environment setup.
     
    To move company data:
     
    1. Export Data:
     
    Use Configuration Packages (RapidStart) to export master data (customers, items, vendors, etc.).
     
    For transactional data, consider exporting journal entries or using data export extensions.
     
     
     
    2. Set Up New Environment:
     
    In the correct region (e.g., U.S.), create a new sandbox or production environment from the Admin Center.
     
     
     
    3. Import Data:
     
    Recreate the company structure.
     
    Use the same configuration packages to import the data into the new environment.
     
     
     
    4. Test Tax Setup:
     
    Configure Sales Tax (not VAT) using U.S. localization.
     
    Verify correct tax groups, jurisdictions, and codes.
     
     
    Mark this as the verified answer if it helps.

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