I noticed that when I entered the customs invoice, the lines where I apply the customs VAT rate (Pass-through 100%) the total do not reflect the total tax value. See this.
I would assume that something similar to Inclusive Tax format would be adequate like this.
Is this by design? Or is this something that should be fixed?
The VAT inclusive calculation of AED based on line-item Diabetic fromal 605 at 156.45 with SHJ VAT 5 (5%) is correct at AED 7.45 assuming you did the standard inclusive VAT calculation as follows: a) 156.45 / 105 (for 5% VAT) = 1.49, then b) mulitply by 100 so becomes 149 and then take 5% of that which is 149 * 0.05 = 7.45
As you did not indicate Tax on the other 2 items the displayed total of 447.95 which includes AED 7.45 is correct.
UPDATE: I meant to say that Manager calculated the VAT inclusive rate correctly as wit would apply the calculation steps I presented here
Your calculation is correct, but I am not arguing that. I just through the second screenshot as an example 
My question is about the pass through rate (Customs VAT) shown in the first screen not being displayed in the totals.
Yes, as explained in the Guide: https://www.manager.io/guides/8901. (See the explanation under “Custom tax codes” heading on choices for the Tax rate dropdown menu.)
However, it looks like you might be misusing pass-through tax codes. You did not explain what your first screen shot shows, but I suspect it is a portion of a purchase invoice. The descriptions suggest you are manually calculating percentages of items that are subject to VAT, then applying a pass-through code to the results of those calculations. That is not the purpose of pass-through tax codes. They are meant for items that are, themselves, all tax and are payable to a tax authority (or collection agent).
The tax information in the totals section of the invoice is about taxes applied to line items on the invoice. Those taxes are being collected on behalf of the tax authority by the supplier (who in some cases might be the tax authority).
Depending on who the supplier is for this (presumed) purchase invoice, a regular VAT code would normally have been applied to the 394 Customs Duty line item rather than adding a separate pass-through tax code line item for 19.70.
The second line item for VAT on CIF makes no sense to me. Is there possibly a typographical error in the description? The 394.04 figure seems unrelated to 788.82.
Hi @Tut I will first address your last couple of comments to make things a bit clearer.
You’re right, but this is how UPS invoiced us, and it’s much easier to enter the purchase invoice as is than to correct the presentation. Anyway, your method here is correct.
My bad 
. That’s a typo, the real CIF value is 7880.82.
That aside.
I don’t think I am using it wrong. This tax charge is for thr full tax on imported goods. The full tax base have been recorded in a separate invoice without any tax code to be faithful to the supplier’s invoice.
When goods arrive at customs, they bill us the customs VAT at CIF value – which isn’t a line item in this invoice. I cannot record the base again because that would be double counting, but I have to record the tax.
As I understood, the pass-through rate should be used to record a tax without its corresponding tax base, and that’s exactly what I did.
Just to return back to my original point, a VAT of AED 413.74 is part of this invoice but there’s no mention of it in the totals.
OK. The additional information provides necessary understanding. You are using the pass-through tax code correctly, although it is somewhat uncommon for such bills to come from the carrier. More frequently, in my experience, they come from the government directly. But that is a matter of usage, not accounting.
So this all comes down to Manager’s method of displaying tax amounts in the totals section of invoices. And that I already explained. In this case, the pass-through tax amount (designated by the pass-through tax code) is no different from the other line items UPS billed. That is, no tax is applied to them on the invoice. The pass-through tax code simply provides instructions to the program on where the amount will be posted—to a tax liability account. This instruction, in fact, will override any other account allocation chosen for the line item, because nothing will be left to post to whatever other account might be designated. I hope that is clear.
I understand. I verified the Tax returns and everything is in ship shape, so it’s all just a matter of presentation.
