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Query on VAT Treatment During General Journal (GE) Reversal - Ledger Posting Setup D365 FnO

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Posted on by Raheel Shakeel Khan

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Hi Everyone,

I have a general journal (voucher), and upon reversing it, I noticed that the input tax is being reversed to the output tax GL accounts. Could you please confirm if this is the correct behavior?

Thanks,
Raheel

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Dynamics 365 Finance

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Arvind Bharti 732 Super User 2025 Season 2 on at

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Hi,

Ideally it should reverse with type Input only because it should fall under purchase category.

Can you check in posted tax transaction is it showing under purchase or sales type?

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Raheel Shakeel Khan 285 on at

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Hi Arvind,

Can you check in posted tax transaction is it showing under purchase or sales type?
Answer: I posted bank fee with VAT from GE, and reversing it with another manual entry, because it is not reversing from reverse journal option

Thanks,

Raheel

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André Arnaud de Cal... 301,194 Super User 2025 Season 2 on at

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Hi Raheel,

Can you check the Correction setting on the General Ledger parameters? If it is disabled, try to enable this. This will not switch debit and credit amounts, but will put a negative amount in the original column. That can also have change on the behavior of the tax direction.

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