Hi,
Can some share some insight how or is there functionality in IFS can re-gross the discount amount with tax amount? The prompt payment discount was derived from Gross Amount which includes tax element, therefore the discount amount calculation has also the tax element. I can see the whole amount of discount posted to revenue account when customer pay within the payment term, but without the split of tax amount.
Hi,
Is this an issue reported by your client? What country requires this type of tax handling for a payment term discount.
Most commonly VAT is applied at invoice creation / invoice entry. The payment does not affect the tax liability - A write off could affect the tax liability in some cases.
If the VAT (tax) is created at payment, the full tax is typically reported regardless of payment term discount.
Payment term discount is commonly a finance adjustment and does not affect the tax basis (typically).
I don’t recall a country where the tax was affected by a payment term discount.
Not saying this is true globally, It would be very good to get the country and tax specifics.
Best regards.
Hi,
I’m thinking it would be best to log a support ticket. Make sure to explain the country specific “legal” requirement.
Best regards
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