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How to perform Line level tax calculation for sales orders

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Posted on by T Henry

Hi Everyone,

I was wondering if there is a way to change Business Central tax calculation to line level rather than order level?

Our ecommerce systems are applying tax at the line level. We sometimes see penny difference because of this.

After some searching, Shopify also explains tax on the line level for Canada: Manage your Canadian taxes · Shopify Help Center

Tax rounding

Previously, taxes were rounded at the invoice level by calculating the taxes on the order's subtotal, and then rounding the results. After you update your settings to use the EU tax features, tax amounts are rounded at the line-item level. In this case, the total tax value is calculated by applying the tax rate to each line in the order, rounding the result, and then adding these subtotals together to arrive at the total value of the order.

Rounding taxes at the line level improves the calculation of different tax rates and makes it easier to calculate taxes for orders that include taxable and non-taxable products.

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Community Member Microsoft Employee on at

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RE: How to perform Line level tax calculation for sales orders

Hello,

Rounding Type and Amount Rounding Precision play into the rounding up and down. If you have played with this and you are still getting and incorrect value and your Tax rates are correct, I would have your Partner submit a Microsoft Support ticket.

I have also used CCH and Avalara to resolve many Tax issues since they are a Tax Service and file the returns for the companies with accuracy.

Hope this helps.

Thanks,

Steve
Samantha73 2,484 on at

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RE: How to perform Line level tax calculation for sales orders

This has been a problem for us since there is no reliable mechanism to overwrite tax in BC via API or I haven't seen any code samples.
T Henry 74 on at

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RE: How to perform Line level tax calculation for sales orders

Hi Steven,

We are not using Shopify I just used it for an example of how tax is supposed to be calculated.

I used a Cronus Canada demo environment and I get the same incorrect tax calculation.

I went to the government website (GST/HST calculator (and rates) - Canada.ca) and says the tax should be $6.34 vs BC which is $6.33.

I have made modifications to the General Ledger Setup for VAT Rounding Type and Unit-Amount Rounding Precision but nothing is taking effect to get the tax to $6.34. I'm at a loss here how to get BC to get the tax right.

Government of Canada Tax Calculator

Two line items with 1 quantity each

One line item with 2 quantity
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Community Member Microsoft Employee on at

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RE: How to perform Line level tax calculation for sales orders

Hello,

If you are using a Tax APP like CCH or Avalara they will report the Tax by Sales Line since each Line can be Taxable or Not Taxable. You will see this in the column Amount Incl. Tax. The Tax APP makes sure that any rounding is resolved. In Canada, you should have setup Sales Tax for the GST, PST, HST, QST correct and the Tax Area setup will define rounding.

If you are using Shopify and the BC has CCH or Avalara, they have integrations.

Hope this helps.

Thanks,

Steve
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JAngle 46 on at

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RE: How to perform Line level tax calculation for sales orders

Less knowledgeable of sales tax but the calculation is at line level. If a line was marked as non-taxable it would reflect solely for that line. I suspect it is more amount amount or VAT rounding setup. Consider this from the general ledger setup: