In Belgium payment discounts are always calculated on amounts excluding VAT. When the VAT is calculated on the lowered amount of the invoice, Microsoft Dynamics-NAV considers this as granting a VAT tolerance. This implies that the total invoice amount will only be calculated correctly if the VAT tolerance % (general ledger setup) is equal or bigger than the payment discount % set on the invoice.

An example: Sales invoice: € 1.000 excl VAT

Payment discount:    10%

VAT tolerance:         3%

Calculation without payment discount:      

VAT:                                1.000 * 0,21 = 210

          total invoice amount:          1.000 + 210 = 1.210

Calculation with payment discount:          

discount:                          1.000 – 10 = 900

          VAT:                                900 * 0,21 = 189

          total invoice amount:          900 + 189 = 1.089            

Notice that the VAT is € 21 less then without payment discount, or a 10% VAT tolerance.

Calculation by Microsoft Dynamics-NAV:

          discount:                          1.000 – 10 = 900

          VAT:                                1.000 * 0,21 = 210

                                                210 * 0,03 = 6,3

                                                210 – 6,3 = 203,7

          total invoice amount:          900 + 203,7 = 1.203,7

Navision only allows a 3 % VAT tolerance, which results in a € 6,3 discount on the VAT amount instead of € 21.

Comments

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