The total revenue excluding VAT amount and the indicated VAT on the daily and/or period count do not match when recalculated. How is that possible?

RetailVista ERP and RetailVista POS work with rounding of VAT per sales line. The consequence of this is that the VAT at the total level will never completely match. A financial package will have to book this difference as VAT difference. By the way, this way of calculating is allowed by the tax authorities.

This is not a calculation error in RetailVista, but the result of inevitable rounding differences. If you send five invoices of 0.50, you will get exactly the same rounding difference of 2 cents. You will understand that these roundings are inevitable for the sake of correct bookings and calculations. In short, the invoicing module assumes that the calculation of VAT amounts per line on an invoice must be correct.

Solution

RetailVista must calculate the VAT amount per line when compiling total amounts because different VAT rates can be used per line. In addition to this flexibility, it must also be possible to print the VAT per line on, for example, invoices (a practice that is often used). This means that RetailVista must round the VAT amount per line to (at most) two decimal places during input. With a VAT rate of 19%, this quickly means that small rounding differences can occur. A simple example makes this clear.

Example

There are five invoice lines on an invoice, each with a net amount of 0.50 euros. The applied VAT rate is 19%. The VAT is calculated per line with two decimal places accuracy, so 0.10 euros VAT is calculated for each line. The total VAT amount for the mentioned five products is therefore 0.50 euros. However, if you manually calculate the VAT amount for the total net amount, the calculation will be as follows: 2.50 * 19% = 0.475 (rounded to 0.48), which results in a difference of 0.02 euros.

More information

The tax legislation does not prescribe whether VAT should be recalculated from total amounts or whether VAT should be determined per line and then totaled. The choice of method is left to the software developer. Given the above explanation, NedFox has chosen to do this from each individual line.

Links

Albert Heijn lawsuit regarding the rounding system used for rounding up or down per line: The outcome of that lawsuit was that VAT should not necessarily be rounded up or down, but should be rounded per line based on customary rounding to the nearest 0.5 cent.

http://www.elsevierfiscaal.nl/nieuwsoverzicht/id104-30804/ahold-dreigt-strijd-over-afronding-btw-te-verliezen.htm 

http://curia.europa.eu/jurisp/cgi-bin/form.pl?lang=NL&Submit=Rechercher$docrequire=alldocs&numaff=C-484/06&datefs=&datefe=&nomusuel=&domaine=&mots=&resmax=100 

Tax authority/ministry directive in response to uncertainties CPP2007/308M. In summary, the directive states that you are free to choose whether to work from totals or from lines, as long as you apply correct rounding in the latter case. The decision is made to leave this to software developers/companies to prevent administrative burdens.

http://aa2.nl/documents/factuureisen_besluit_19042007.pdf