VAT being incorrectly calculated

[Former Member]

Forum,

I have noticed that when entering an AR Invoice the VAT being calculated is 19.5% and not 20%. This is despite the BP being marked as liable and the sales/purchase data tabs against the item are also 20%. I seem to have narrowed it down to being the payment term associated to the Business Partner. The payment terms is set up as follows:

Customer 2.5% Settle disc.

No. of installments = 0

Open incoming payment = 0

Cash discount Name: 2.5% 14Days

Within the above cash discount is an amount of 2.5% - this is causing the issue. Upon reading the help file it doesn't mention discounting the VAT amount unless it's a country specific field?

The localisation setting is UK.

Has anyone come across this before?

Regards,

Juan

[Former Member]

Hi Juan.....

Do you have any Rounding applied to Tax Formula.

Try removing and then try to see the effect.

Else

Create new tax type and give appropriate Tax Rate and then take it into action........

Regards,

Rahul

[Former Member]

Rahul,

Thanks for the advice. When using the same tax rate for another BP, it's correctly calculating the VAT hence I narrowed it down to the payment terms assigned to the BP.

Regards,

[Former Member]

Hi,

I have a same issue, what was the solution?

Many Thanks,

Laszlo