VAT Calculation Method (Recalculate, Gross, or Net)

Three VAT processing options are available:

·     Net - Calculate VAT based on the net (of cash discount) invoice amount.

·     Gross - Calculate VAT based on the gross invoice amount.

·     Recalculating - Calculate VAT based on the gross invoice amount and recalculate when payment is made, based on the amount of the payment and the actual discount taken.

The VAT processing method is defined at different levels in Accounts Receivable and Accounts Payable.  For Accounts Receivable, the option is defined at the company/location level, on Reference File category 132.  For Accounts Payable, the option is defined for each vendor on the Vendor Master File.