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

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

3. Note the total tax amount for the purchase invoice – with current tax rates this should be $12
4. Add a second line with the same settings
5. 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

The issue with exporting reports is resolved in version 1.2.20214 of the Zetadocs Expenses Extension for Business Central, which was released in the Zetadocs Expenses August 2020 update.

For systems running older versions of the extension, 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:

Status

This issue has been corrected in the software update detailed above.

Last updated: 26th August 2020 (GW) 

Keywords: BC