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D365 Localization CANADA. Can not find discount applied in VAT . Only in Invoice

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Posted on by KC-13111253-0

In D365 Business Central , in Canada localization is a step that should be tested: Adjust for payment discount. After I post purchase, make payment journal, discount is applied in invoice based on payment terms , I can not find what happen with VAT values, does VAT is discount acordinly to total invoice discount?? because this is the main goal, WHAT HAPPEN TO VAT?? I an not find where to check if VAT went from e.g 100 to 99 based on discount applied after payment.

I checked all entries, vendor entries, GL entries, VAT entries, Can anyone you help me where to find what happen to VAT values??

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Jainam M. Kothari 15,639 Super User 2025 Season 2 on at

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Hello,

In Dynamics 365 Business Central, when you apply a payment discount, the VAT amount should be adjusted accordingly. This adjustment ensures that the VAT reflects the discounted invoice amount. To verify the VAT adjustment, you can follow these steps:

Check the VAT Entries: Navigate to the VAT Entries page to see the detailed VAT transactions. This page should show the adjusted VAT amounts after the payment discount is applied.

Review the General Ledger Entries: The General Ledger Entries page will also reflect the adjusted VAT amounts. Look for entries related to the payment discount.

Vendor Ledger Entries: Check the Vendor Ledger Entries to see the impact of the payment discount on the VAT amounts.

To ensure that VAT is adjusted correctly, you need to activate the "Adjust for Payment Disc." field in both the General Ledger Setup and the VAT Posting Setup

This setting ensures that the VAT amount is recalculated based on the discounted invoice amount.

If you still can't find the adjusted VAT values, you might need to manually correct the VAT amounts. You can do this by adjusting the VAT entries directly or by using a journal entry to reflect the correct VAT amount.

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Khushbu Rajvi. 20,962 Super User 2025 Season 2 on at

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Hope this helps"https://learn.microsoft.com/en-us/dynamics365/business-central/finance-work-with-vat

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Ramesh Kumar 7,529 Super User 2025 Season 2 on at

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Hi,

Canada doesn't have VAT. Are you referring to GST/HST calculations? If so, GST/HST/PST/QST should be calculated based on the tax posting group and ship to address selected, applied to the unit price after the discount.

Let me know if this helps. If not, please share some screenshots for review

If this helped you, please check the box Does this answer your question?

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YUN ZHU 95,763 Super User 2025 Season 2 on at

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Hi, Regarding localization issues, I recommend that you submit them to the BC Yammer Group, where Microsoft technical staff will see and respond to you.

Viva Engage : Dynamics 365 Business Central Partner Community (Formerly: Development) : Localization & Legislation : New Conversations

PS: aka.ms/BCYammer: Dynamics 365 Business Central Partner Community (Formerly: Development)
More details: About Business Central partner community on Viva Engage (formerly Yammer)

Thanks.

ZHU

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Valentin Castravet 31,551 Super User 2025 Season 2 on at

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Canada doesn't have VAT. It has GST/PST/HST/QST depending on the province. However, the tax amount on the invoice won’t change due to a payment discount, it remains the same.

Valentin Castravet
Work: Zander ERP Services
Blog: Dynamics 365 Business Central Insights
LinkedIn: www.linkedin.com/in/valentin-c-0500a247/

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