Notifications
Clear all

3379849 - How is the Tax Rounding Difference allocated to line item row levels?

1 Posts
1 Users
0 Likes
132 Views
admin
Posts: 350
Admin
Topic starter
(@admin)
Prominent Member
Joined: 3 years ago

Symptom

When a marketing document is created, there is a difference between the tax amount at the document header level and the tax amount at the line level. How does the system allocate the rounding difference back to the line item rows?

Environment

SAP Business One

Reproducing the Issue

Scenario:

Add a document with:

  • Item A - Quantity: 1 Unit Price: $4
  • Item B - Quantity: 1 Unit Price: $3 
  • Item C - Quantity: 1 Unit Price: $3 
  • The tax rate is 17.5%.

Actual behavior:

  1. Calculate line tax:
    • Item A - 1 x $4 x 17.5% = $0.70
    • Item B - 1 x $3 x 17.5% = $0.53 (rounded from 0.525)
    • Item C - 1 x $3 x 17.5% = $0.53 (rounded from 0.525)
    • Total line tax = $1.76
  2. Calculate document header tax:
    • Header tax = (sum of all prices before tax) x tax rate
    • Header tax = ($4 + $3 + $3) x 17.5%
    • Header tax = $10 x 17.5%
    • Header tax = $1.75
  3. Calculate the tax difference:
    • Tax difference = header tax - line total tax
    • Tax difference = $1.75 - $1.76
    • Tax difference = $0.01
  4. Allocate the $0.01 Tax Difference:
    • Item weight = (prices before tax / sum of all (remaining item) prices before tax) x tax difference
      • Check for Item A
        • Item A = [$4/($4 + $3 + $3)] x $0.01
        • Item A = [$4/$10] x $0.01 = 0.004
        • Note: When $0.004 is rounded off, it will be rounded to $0.00. Hence, the $0.01 is still available for other line item rows.
      • Check for Item B
        • Item B = [$3/($3 + $3)] x $0.01
        • Item B = [$3/$6] x $0.01 = 0.005
        • Note: When $0.005 is rounded off, it will be rounded to $0.01. Hence, the $0.01 tax difference is now used up. The final tax of line item B is now reduced by $0.01. Thus, $0.52.
      • Check for Item C
        • There will be no checks made for Item C because at this stage, the $0.01 tax difference has been allocated to Item B.
  5. Final line item taxes:
    • Item A - $0.70
    • Item B - $0.53 - $0.01 = $0.52
    • Item C - $0.53
    • Total Line Tax = $1.75

Resolution

The tax rounding difference is distributed to line item rows based on the weight of each line item. This weight is calculated as row total / total of all rows.

Reply
Share:
x  Powerful Protection for WordPress, from Shield Security
This Site Is Protected By
Shield Security