The key to understanding this, @Aries_Gonzales_Carag, is to realize that VAT Exempt is a 0% tax code. When invoices are tax-inclusive, Manager calculates the tax to be backed out of the unit price and credits the remaining amount to the income account. When invoices are tax-exclusive, Manager calculates the tax and adds it to the unit price.
So, for your VAT Exempt situation, Manager backs 0% out of 10,000 and is left with the starting unit price of 10,000. The program does not determine what the tax would be under some other percentage tax code and remove that from the unit price.
If you are using non-inventory items to define your services, there is a way around this, while still marking the invoice as tax-inclusive. Define two non-inventory items:
- HOTEL ACCOMODATION with a selling price of 10,000
- HOTEL ACCOMODATION (VAT EXEMPT) with a selling price of 8,928.57
Then, when selling the second non-inventory item, applying the VAT Exempt tax code, and marking the sales invoice as tax-inclusive, the Total will be what you want. Staff members entering the transactions could follow exactly the same procedures for both taxable and tax-exempt customers. They would simply be selling them different products with different prices.
In fact, having non-inventory items for all your different room rates (single, double, family, government, corporate, or whatever) in taxable and tax-exempt versions is probably a good idea. You can then also discount any particular rate if you have promotions, etc.