Sometimes companies get purchase invoices on which different lines may have different taxes. For example, if goods are purchased from abroad, it is likely that the goods are non-taxable, whereas, the freight is taxable. Such a situation is called “Tax Difference” in Microsoft Dynamics NAV and this post focuses on how to allow Tax Differences in the application. The goal of this blog post is to show how to set up Tax Differences for Purchase Invoices and Purchase Orders. This article is based on Dynamics NAV 2017; however, you may find that the “Tax Difference” setups discussed here are identical in other versions of Dynamics NAV and even in Dynamics 365 for Finance and Operations, Business Edition.
The first area to be set up is the General Ledger Setup (Departments>Financial Management>Setup>Administration>General Ledger Setup or search for “General Ledger Setup” in the Application Search Box). On this Page, it is necessary to enter the maximum tax difference that Users should be able to enter as shown in Screenshot 1 below. The exact amount can be determined by each company, the amount shown in the screenshot (40,000.00) is just an example.
Now that the General Ledger Setup is prepared, it is necessary to go to the Purchases & Payables Setup (Departments>Purchasing>Setup>Purchases & Payables Setup or type in “Purchases & Payables Setup” in the Application Search Box). The field that is required here is “Allow Tax Difference”. By default, it is disabled, but it is necessary to tick it as shown in Screenshot 2 below. Without enabling this field, Users are unable to adjust tax amount on Purchase Invoices and Purchase Orders.
This is all that is required. Now Users can go to a Purchase Invoice and use the Tax Difference function. In order to do so, select a desired Purchase Invoice and click on the “Statistics” button in the ribbon. This opens the “Statistics” Page related to this Invoice. In order to adjust the tax amount, Users need to click on the “Tax Amount” field and adjust the tax amount as needed. The “Tax %” field will update automatically as shown on Screenshot 3 below.
Importantly, if you would like to adjust the tax amount on a Purchase Order, the Order has to be released before you can do so.
If you use multiple currencies in the same company in Dynamics NAV and would like to be able to adjust tax amounts in currencies other than the local currency, it is necessary to set up one more area. For this purpose, navigate to the “Currencies” Page (Departments>Financial Management>Financial Management>Periodic Activities>Currency>Currencies or search for “Currencies” in the Application Search Box).
The field that is of interest here is the “Max. Tax Difference Allowed” field. However, by default, it is hidden and needs to be added to this Page. Right-click on the Page rows or Columns and select the “Choose Columns…” choice. From the dialogue window that opens, it is possible to add the required field as shown on Screenshot 4 below. Once the field is added, the maximum tax amount that users should be able to adjust can be added to this field per each Currency found on the list.
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