Equisys technical notes

Technical guidance, explanations and fixes for our products

PRB: Export fails with sales tax rate mismatch error on Canadian systems

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ZTN6009

This Zetadocs technical note applies to:

  • Zetadocs Expenses
  • Canadian Microsoft Dynamics Business Central or NAV systems using the Expense/Capitalize setting for one or more sales tax rates

Symptom

When exporting a report containing two or more expenses from Zetadocs Expenses to Business Central, the export fails and the report history shows an error similar to the following:

Export of reimbursable expenses failed. Error exporting expense ID 123. Sales Tax / VAT amount calculated with keys BC TAXABLE does not match the expected amount. Check the sales tax rate configuration. [ERR_InvalidDataVatMismatch]

Checking the Tax Details screen in Business Central for that company shows that the percentage rates match the configuration settings in the Zetadocs Expenses system, but the Expense/Capitalize option is enabled for some of the tax rates.

Further Information

The Canadian variant of Business Central allows specific tax rates to be configured as non-reclaimable.  This is done by setting an option called “Expense/Capitalize” for the sales tax rate, which causes Business Central to post the sales tax amount to the G/L account for the line entry (eg “Travel”) rather than the G/L account for reimbursable sales tax.

This option is designed for use in provinces where some or all of the sales tax on purchases cannot be reclaimed by a company.  For example, when a Canadian company purchases an item in British Columbia the seller adds 5% Goods and Services federal tax (GST) and 7% Provincial Sales Tax (PST).  However the PST amount cannot be reclaimed, so will typically be configured in Business Central with the “Expense/Capitalize” option.

Unfortunately there is an issue with the current release of Business Central affecting the sales tax calculation when creating a purchase invoice.  This issue causes Business Central to calculate the tax incorrectly if the purchase invoice contains two or more lines and includes sales tax rates with the “Expense/Capitalize” setting enabled.

On a Canadian Business Central system you can check whether this issue affects your system by doing the following test:

  1. Create a draft purchase invoice, enable the “Tax Liable” setting and set the invoice Tax Area to “BC”.
  2. Add a line as follows:
  • Type = G/L Account
  • No. = example posting account (eg 61300, “Travel”)
  • Direct Unit Cost Excl. VAT = $100
  • Tax Area Code = BC
  • Tax Group Code = TAXABLE
  1. Note the total tax amount for the purchase invoice – with current tax rates this should be $12
  2. Add a second line with the same settings
  3. Note the total tax amount for the purchase invoice.  This should be twice the total with one line – ie $24 with current tax rates.  If the total tax amount is different (as shown in the screenshot below) then the tax on the second line has been calculated incorrectly and your Business Central system has this issue.

When Zetadocs Expenses creates a purchase invoice line for an expense it checks the tax amount which has been calculated.  If this does not match the amount it is expecting then it aborts the export with the error message given above.  This causes the export process to fail on Business Central systems with the tax calculation issue.

Resolution

Equisys are raising this issue with Microsoft, and it is likely to be resolved in a future Business Central software release.  Equisys are also investigating options to workaround the issue in the Zetadocs Expenses software.

In the meantime you can avoid the issue by changing the percentage for all sales tax rates which are not fully reclaimable to 0%.  This will prevent the system from reclaiming the federal tax (GST) portion of those expenses but will allow reports to be exported to Business Central.  With current tax rates this will require settings similar to the following:

Name

Rate

Tax Area Code

Tax Group Code

British Columbia

0%

BC

NONTAXABLE

Manitoba

0%

MB

NONTAXABLE

Saskatchewan

0%

SK

NONTAXABLE

Status

This issue is caused by a software fault in Microsoft Dynamics Business Central and will be resolved when that issue is corrected.

Last updated: 13th May 2020 (GW) 

Keywords: BC

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