I am facing some VAT 5.5% calculation issue while entering data in purchase invoice.
VAT 5.5% is not calculating correct data but when I use 14.5% it calculate correctly.
Attached is the screenshot.aad1cff3-137b-4419-8f10-d9b4f2bcb51b.pdf (140.5 KB)
This looks like a bug. I will elevate it for attention. The India (Karnataka) - VAT 5.5% built-in tax code is actually calculating tax at 15.5.%. This is probably a typographical error in the tax code definition.
I also wonder, though, how you produced a purchase invoice without boundary lines on columns and cells. What version of the software are you using?
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Boundaries are might be erased while I was highlighting the TAX errors but I can see the boundary on my sheet.
I’m using Manager 16.10.86 version.
5.5% is custom tax code. Maybe you misconfigured it?
Can you show screenshot how that tax code has been created under Settings → Tax Codes ?
I don’t think so, @lubos. That was my first thought, also. But, as I said in my earlier response:
I reproduced the problem with this code because it was the only built-in code at 5.5%. I confirmed that before elevating the problem as a bug.
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You are right, I can see it now.
5.5% tax problem has been fixed by configuring custom tax but, when I select VAT5.5% from built-in TAX it still give me the incorrect calculation.
OK, I fixed those rates in the latest version.
14.5% wasn’t calculating correctly as well since it was set internally to calculate at 15.5%.
Anyway, check the latest version and test it out.
Thank you for all your support.
I seem to have the same problem now
I have version 16.12.56 and for the amount of 614.36€ it gives for 19% VAT 116.71€ but if you do the calculation the VAT should be 116.7284€ → rounded to 2 decimals → 116.73€
Why is this? Can you please advise?
Is the 614.36 a single item or is it the sub-total figure for several items.
VAT is calculated per line item rounded and then added up.
VAT is “not” calculated on the sub-total figure
So if you have several individual items rounded down, then you can end up with such a variance
you are right - this is how is done in the manager however in my country they calculate the VAT on the total of the invoice
is there a way around to this?
after all the vat is not shown in every line of the invoice…
Not that I am aware of, except individual invoices per item which probably isn’t practical.
The majority of countries do it as Manager does it for the following reason:
If you invoice 10 items on individual invoices - their VAT adds up to xx.xx
Therefore if you invoice the 10 items on a single invoice - the VAT should still add up to xx.xx
If you use the Invoice total then the VAT could calculate to xx.xy
Another reason taxes are calculated on individual line items is that the same invoice could include items taxable at different rates or excluded from tax entirely. A calculation based on the total could not accommodate this.
Likewise, if a single line item on a sales invoice with many line items is returned, only the tax from the returned item is calculated and rebated.
In most tax jurisdictions, there are explicit regulations permitting line by line calculation, and sometimes requiring it. This is the way virtually all modern accounting software works.
Pretty old case this is I know but one International company we engage has their Ariba system rejecting our invoices over 1c difference in GST calculated,
Invoice example below:
Manager calculates as follows in Server Version 20.2.64
Calculating on Total according to Ariba and the calculator should be $809.97 not $809.98
A few of these is causing money to be realised 40 plus days later in the company bank account.
Maybe there can be some check on GST calculation on excluding GST total to circumvent the issue?
@compuit, you just happen—on your example invoice—to have 3 of 4 line items for which the tax rounds up and 1 on which it rounds down. Would the customer have insisted on your matching their antiquated calculation method (calculating tax on the subtotal instead of each line item) if your invoice happened to round 3 of 4 down and charged one less cent than their calculation? Probably so, because many companies habitually look for any excuse to delay paying their obligations.
But you cannot just insert an arbitrary tax adjustment. If the program allowed that, users could put in any bogus number they wanted.
I suppose we will have to live with it … The situation is not limited to one or two invoices in our case so the number gets crazy and to think it is over a few cents.
@compuit It maybe worth checking exactly what round is required in your jurisdiction. In Australia the requirement is clearly stated in Tax invoices | Australian Taxation Office, an extract of which is:
- Total invoice rule – under this rule, the unrounded amounts of GST for each taxable sale should be totalled and then rounded to the nearest cent (rounding 0.5 cents upwards).
- Taxable supply rule – under this rule, you need to work out the amount of GST for each individual taxable sale. Where the unrounded amount of GST has more decimal places than your accounting system can record, the amount should be rounded up or down as appropriate. You then need to add the individual amounts and round this total to the nearest cent (rounding 0.5 cents upwards).
You and your customers don’t need to use the same rounding rules.
End Quote
Managers compliance requires interpreting “more decimal places than your accounting system can record” as Managers ability to record line item GST only to the minimum legal tender, and as a result the final rounding at the invoice level always produces no change.
Importantly for your negotiations with your supplier is the last paragraph “You and your customers don’t need to use the same rounding rules.” providing both comply with the tax offices rules.
Guys just so I understand what is going on here. I understand that GST in Manager is calculated on a line by line basis and then summed, correct?
So using the example above I manually calculated the GST on Total and Line by and then summed to give the GST inclusive total.
Am I totally messed up here because processing both ways I get the same result but Manager calculates slightly different? How does Manager sneak in the extra cent to give $809.98? Look at the rounding it is already rounding up.
OK here is a bit more… rounding at each line then summing
I get the horrible feeling these guys / Ariba are right at rejecting my invoices and Manager is wrong?
By the way the Head Office we deal with is in AU.
Look at example … I do not think so.
if you round each line and then add them you will get 809.98 which is how Manager calculates.
Manager will round each line as per the number preference the user has set.
your third example is wrong because you have rounded the line items to two decimal places. yet you assumed the total to be three decimal places and rounded it separately.
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