VAT Calculations for Discounts

For discounts, the system uses the VAT calculation method at payment time to determine VAT adjustments.

You can apply prompt payment discounts if the advance payment is applied to the invoice before the discount due date, or if the final payment is received (and applied to the invoice) before the discount due date.

If you select VAT Discountable Amount for the basis amount for a payment term, the system calculates the discount amount on the net amount of the item after VAT. Otherwise, it calculates it on the gross amount.

Note:

This scenario applies only to certain countries. For example, it is valid for Germany but not for France.

This topic offers the following examples of discounts:

• VAT declaration point set to Invoice with the VAT recalculation flag on.

• VAT declaration point set to Invoice with the VAT recalculation flag off.