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ReportHi,
How does Business Central calculate total VAT amount in Sales or Purchase document?
Which is correct in Business Central, (1) or (2)?
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Hi,
How does Business Central calculate total VAT amount in Sales or Purchase document?
Which is correct in Business Central, (1) or (2)?
DAnny3211 - This is not correct. The VAT registration number on the customer og vendor is not involved in calculating VAT. The VAT Business Posting group from the vendor or customer is used for this.
Thank you, Inge!
I think I misunderstood VAT calculation in Sales/Purchase document.
VAT is calculated by each VAT Identifier. VAT Identifier is set for each combination VAT Business Posting Group and VAT Product Posting Group in VAT Posting Setup.
If there are 2 VAT Ratio 10% combinations exist in VAT Posting Setup but those VAT Identifiers are different, Total VAT might be different in Sales/Purchase document.
Regards,
[/quote]When you see an over view of the VAT per. VAT identifier that is still just a sum of the VAT calculated on each sales line or each purchase line.
So the VAT is always calculated on the line level but can be presented with a sum per. VAT identifier. One line can only have one VAT % and one VAT identifier.
And the VAT % and VAT identifier is determined by the combination of the VAT posting groups as they are entered in the VAT Posting setup as you describe.
hi
In Business Central, the total VAT amount in a Sales or Purchase document is calculated based on the VAT amount for each individual line item. The VAT calculation is based on the VAT posting setup for the company and the VAT registration number of the customer or vendor.
To answer your specific question, option (1) is correct. Business Central calculates the VAT amount for each line item based on the VAT percentage and the taxable amount. Then, the total VAT amount for the document is calculated by summing the VAT amounts for all the line items.
Here is an example:
Suppose you have a Sales Order with two line items:
Line item 1: Item A with a unit price of 10 USD and a VAT percentage of 10%
Line item 2: Item B with a unit price of 20 USD and a VAT percentage of 20%
The taxable amounts for each line item are:
Line item 1: 10 USD
Line item 2: 20 USD
The VAT amounts for each line item are:
Line item 1: 1 USD (10 USD x 10%)
Line item 2: 4 USD (20 USD x 20%)
Therefore, the total VAT amount for the Sales Order is 5 USD (1 USD + 4 USD).
DAniele
Thank you, Inge!
I think I misunderstood VAT calculation in Sales/Purchase document.
VAT is calculated by each VAT Identifier. VAT Identifier is set for each combination VAT Business Posting Group and VAT Product Posting Group in VAT Posting Setup.
If there are 2 VAT Ratio 10% combinations exist in VAT Posting Setup but those VAT Identifiers are different, Total VAT might be different in Sales/Purchase document.
Regards,
It is calculated line by line so alternative 1 is basically how it is handled.
And the rounding is also done one the line level.
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