Taxing Transactions with a Contingent/Volume Discount
A contingent or volume discount is a discount applied to a sale of a specified volume of goods in a single purchase. Contingent or volume discounts occur at the time of supply and the tax is based on the full value of the supply. If the discount is earned later, credit notes, including tax, have to be raised.
To tax transactions with contingent/volume discounts:
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Verify that you have an item called Discount. If you do not have it in the system, then create one.
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Create an invoice with all items to be charged at the normal price.
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Add a separate line with an item called Discount.
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Select the VAT code for the discount item.
The whole invoice is discounted in this case of volume or contingent discount.