# Problem with 100% pass-through tax rate and foreign currency **URL:** \ **Category:** Uncategorized\ **Created:** [July 7, 2023, 12:51pm UTC](https://forum.manager.io/t/problem-with-100-pass-through-tax-rate-and-foreign-currency/47804 "2023-07-07T12:51:46Z")\ **Posts on this page:** 11\ **Page:** 1
**Author:** ![GrahamvdR](https://avatars.discourse-cdn.com/v4/letter/g/51bf81/32.png) [@GrahamvdR](https://forum.manager.io/u/GrahamvdR)\ **Post date:** [July 7, 2023, 12:51pm UTC](https://forum.manager.io/t/problem-with-100-pass-through-tax-rate-and-foreign-currency/47804/1 "2023-07-07T12:51:46Z")
It looks like there is a problem with the 100% pass-through tax rate that has been introduced with updates within the last few days. My posts in the topic [Historical exchange rates have changed](https://forum.manager.io/t/historical-exchange-rates-have-changed/47734) show how I noticed it and identified the source of the issue. I am starting this new topic as it is no longer directly related to the original subject of that thread and might get lost there. I have created a test business to demonstrate the issue: I have created a base currency (ZWL) and a foreign currency (USD) with a starting exchange rate of 1 ZWL = 0.0005 USD. I have created a tax code of 15% and another pass-through tax code of 100%. I have created a supplier denominated in USD. I have created a purchase invoice from this supplier for an amount of US$100. If I use the 15% tax code on the purchase invoice, everything looks as expected: ![image](https://us1.discourse-cdn.com/flex019/uploads/manager1/original/3X/9/5/952dc4643d13b2736b682e17ac74d942229e7c44.png) However, if I use the 100% pass-through tax rate, we can see a problem: ![image](https://us1.discourse-cdn.com/flex019/uploads/manager1/original/3X/4/9/49855ed975b08377309d08cd3ce32c4005ae6ec9.png) Manager is taking a non-existent amount of US$100 in the expense account and multiplying it by the exchange rate to give a debit in the base currency against that expense account. The problem is also evident on the `Summary` page: ![image](https://us1.discourse-cdn.com/flex019/uploads/manager1/original/3X/4/4/445005e9153f2e67b65bc5c6c9c2c2dc9490d9c1.png) Surely the `Accounts payable` should be 500,000.00 and the `Accounting fees` 0.00? I am using Cloud edition, version 23.7.7.863. ---
**Author:** ![Abeiku](https://sea1.discourse-cdn.com/flex019/user_avatar/forum.manager.io/abeiku/32/44970_2.png) [@Abeiku](https://forum.manager.io/u/Abeiku)\ **Post date:** [July 7, 2023, 3:09pm UTC](https://forum.manager.io/t/problem-with-100-pass-through-tax-rate-and-foreign-currency/47804/2 "2023-07-07T15:09:40Z")
I think something is wrong here. Kindly show edit screen and invoice of second transaction. ---
**Author:** ![GrahamvdR](https://avatars.discourse-cdn.com/v4/letter/g/51bf81/32.png) [@GrahamvdR](https://forum.manager.io/u/GrahamvdR)\ **Post date:** [July 7, 2023, 3:32pm UTC](https://forum.manager.io/t/problem-with-100-pass-through-tax-rate-and-foreign-currency/47804/3 "2023-07-07T15:32:23Z")
![image](https://us1.discourse-cdn.com/flex019/uploads/manager1/original/3X/4/7/47113b2cf737b6b912a6aff22cb6f671083890e4.png) ![image](https://us1.discourse-cdn.com/flex019/uploads/manager1/original/3X/c/6/c6ad08d23255363f8adab7d29ff653d10cb03104.png) ---
**Author:** ![eko](https://avatars.discourse-cdn.com/v4/letter/e/a8b319/32.png) [@eko](https://forum.manager.io/u/eko)\ **Post date:** [July 7, 2023, 3:48pm UTC](https://forum.manager.io/t/problem-with-100-pass-through-tax-rate-and-foreign-currency/47804/4 "2023-07-07T15:48:57Z")
Please show the tax code edit screen of the pass-through tax. ---
**Author:** ![GrahamvdR](https://avatars.discourse-cdn.com/v4/letter/g/51bf81/32.png) [@GrahamvdR](https://forum.manager.io/u/GrahamvdR)\ **Post date:** [July 7, 2023, 3:56pm UTC](https://forum.manager.io/t/problem-with-100-pass-through-tax-rate-and-foreign-currency/47804/5 "2023-07-07T15:56:38Z")
![image](https://us1.discourse-cdn.com/flex019/uploads/manager1/original/3X/b/1/b15f6dd079212868fb8dd1461308c3347e50480f.png) ---
**Author:** ![Abeiku](https://sea1.discourse-cdn.com/flex019/user_avatar/forum.manager.io/abeiku/32/44970_2.png) [@Abeiku](https://forum.manager.io/u/Abeiku)\ **Post date:** [July 7, 2023, 4:28pm UTC](https://forum.manager.io/t/problem-with-100-pass-through-tax-rate-and-foreign-currency/47804/6 "2023-07-07T16:28:25Z")
Try this, replace the “Tax Payable” account for the tax code to a liability account. The Tax Payable is just a placeholder. ---
**Author:** ![GrahamvdR](https://avatars.discourse-cdn.com/v4/letter/g/51bf81/32.png) [@GrahamvdR](https://forum.manager.io/u/GrahamvdR)\ **Post date:** [July 10, 2023, 8:05am UTC](https://forum.manager.io/t/problem-with-100-pass-through-tax-rate-and-foreign-currency/47804/7 "2023-07-10T08:05:53Z")
How would this change anything? `Tax payable` is a built-in account that is created automatically when tax codes are created, but if I create my own account and call it `VAT payable` or something it will work in exactly the same way. ![image](https://us1.discourse-cdn.com/flex019/uploads/manager1/original/3X/9/6/964b15e66d639cb4268622155e0fce14d87ca906.png) ---
**Author:** ![GrahamvdR](https://avatars.discourse-cdn.com/v4/letter/g/51bf81/32.png) [@GrahamvdR](https://forum.manager.io/u/GrahamvdR)\ **Post date:** [July 10, 2023, 8:13am UTC](https://forum.manager.io/t/problem-with-100-pass-through-tax-rate-and-foreign-currency/47804/8 "2023-07-10T08:13:21Z")
I’ve just done a test in the base currency, and it looks like the issue is present there too: ![image](https://us1.discourse-cdn.com/flex019/uploads/manager1/original/3X/e/9/e9201a26242ac0a027f41167a2e70572d9074377.png) ![image](https://us1.discourse-cdn.com/flex019/uploads/manager1/original/3X/1/6/16d50df2f92281fd38b760f788a8de4dab6c64ba.png) ---
**Author:** ![lubos](https://sea1.discourse-cdn.com/flex019/user_avatar/forum.manager.io/lubos/32/62798_2.png) [@lubos](https://forum.manager.io/u/lubos)\ **Post date:** [July 10, 2023, 9:10am UTC](https://forum.manager.io/t/problem-with-100-pass-through-tax-rate-and-foreign-currency/47804/9 "2023-07-10T09:10:44Z")
Definitely this is a bug. ---
**Author:** ![lubos](https://sea1.discourse-cdn.com/flex019/user_avatar/forum.manager.io/lubos/32/62798_2.png) [@lubos](https://forum.manager.io/u/lubos)\ **Post date:** [July 10, 2023, 9:50am UTC](https://forum.manager.io/t/problem-with-100-pass-through-tax-rate-and-foreign-currency/47804/10 "2023-07-10T09:50:01Z")
Fixed in the latest version (23.7.10.867) ---
**Author:** ![Ealfardan](https://sea1.discourse-cdn.com/flex019/user_avatar/forum.manager.io/ealfardan/32/63166_2.png) [@Ealfardan](https://forum.manager.io/u/Ealfardan)\ **Post date:** [July 5, 2026, 8:00pm UTC](https://forum.manager.io/t/problem-with-100-pass-through-tax-rate-and-foreign-currency/47804/11 "2026-07-05T20:00:56Z")
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