Release 380 : Synchronize Tax Calculation for Payment Discount in Sales Invoice

Background

 

In previous release of Exact Globe, when the General Ledger Settings: Tax & Discount Calculation option is set to Tax calculated over net invoice amount including discount (menu path: System / General / Settings / General ledger settings / Tax & discount calculation), the Total Invoice Amount in the Sales Invoice Entry is not calculate correctly and will be different from the Sales Journal Entry for VAT type Including. This is because the Invoice Amount is been reduced by the Discount Amount that proportionally deducted from the VAT Amount of the invoice.

 

The calculation process is as following for VAT type Including

 

Values	Formulas
Base Amount (Sales Price excluding VAT)	( Price Amount * Quantity ) / ( 1 + VAT Percentage )
Discount Amount	Base Amount * Discount Percentage
Net VAT Base Amount	Base Amount – Discount Amount
VAT Amount	Net VAT Base Amount * VAT Percentage
Invoice Amount	Base Amount + VAT Amount

 

What has been changed

 

The calculation process for the Sales Invoice Entry has been changed for VAT type Including, when calculate the Base Amount (Sales Price excluding VAT), the VAT discounts will be deducted from the VAT Percentage instead of deduct part of the VAT discounts from the Total Invoice Amount. The current calculation will be as follow:

 

Values	Formulas
VAT discount	VAT Percentage * Discount Percentage
Base Amount (Sales Price excluding VAT)	( Price Amount * Quantity ) / ( 1 + ( VAT Percentage – VAT discount ) )
Discount Amount	Base Amount * Discount Percentage
Net VAT Base Amount	Base Amount – Discount Amount
VAT Amount	Net VAT Base Amount * VAT Percentage
Invoice Amount	Base Amount + VAT Amount

 

The scope and limitation of this new change are:

1. The new calculation process will only affect VAT type Including and will not be reflected in the situation where the VAT Type in the lines is Excluding.

2. This change will not support mix VAT Type in a single sales invoice. If any of the lines is referring to the VAT type Including, the VAT amount calculated will be based on this VAT Type.

3. The new change only applies for the following legislations:

   - Portugal

   - Belgium

   - Luxembourg

   - Singapore

   - International Legislation

   - Vietnam

   - Spain

   - Romania

   - Denmark

   - Sweden

   - France

   - Colombia

4. The new change only applies to:

   - Sales Invoice Entry

   - Direct Invoice Entry

   - Print / Process Invoice

   - Purchase Order Entry

   - Sales Order Entry

   - Sales / Purchase Journal

5. This change only applies when General Ledger Settings: Tax & Discount Calculation option is set to “Tax calculated over net invoice amount including discount”.

6. This change will recalculate the Total Net Amount and Total Tax Amount, based on the expected Total Invoice Amount.

7. Line items’ amount is not affected.

8. The new change only applies to the multiple tax codes environment.

The following two examples will show how the figures are derived in the new calculation method:

 

Example 1: Fixed / Single VAT Code

 

 

  Sales Invoice Entry

 

 

  Journal Entry

 

Example 2: Different VAT Code Used in the Sales Invoice

 

 

  Sales Invoice Entry

 

 

  Journal Entry