Different taxes may require different methods of calculation.
You can select the
appropriate option in the Calculate on field in the VAT (TX205000) window.
The following options are available:
- Extract from item amount:
The VAT is already included in the item price.
The
system extracts the VAT amount from the item amount according to the VAT rate that you
specify.
- Item amount:
The VAT amount is calculated on a per-item basis; that
is, the VAT is applied to each line in the document.
- Document amount:
The VAT amount is calculated on a per-document basis.
That is, the document total amount is used for VAT calculation.
- Item + VAT amount:
The VAT amount is
calculated by using as the tax base the sum of the item amounts and the VAT amount.
- Document + VAT amount:
The VAT amount is
calculated by using as the tax base the sum of the document amount and the VAT amount.
Consider an example in which the different VAT calculation methods are used.
Imagine that
the document contains 100 items, each priced at €10, and the VAT rate is 8.25%:
- With the per-document method, the tax base (total amount of the document) would be 100
items x €.10= €.1000.
Then the VAT amount would be €1000 x .0825 = €82.5.
- With the per-item method, the VAT amount per item would be €10 x .0825 = €0.825, which
rounds to €0.83.
Then the total VAT amount would be €0.83 x 100 items = €83.
As you can see, using different methods of VAT calculation for the same documents may
cause discrepancies in the document totals due to rounding.
Thus, you need to choose the
calculation method that best suits your needs.