VAT rounding RetailVista and POS4All

If a total VAT amount calculated by RetailVista is checked by manually calculating the VAT on the total net amount, it may appear that the VAT amount is incorrect.

Cause

This is not a calculation error in RetailVista, but the result of inevitable rounding differences. If you send 5 invoices of €0.50, there will be exactly the same rounding difference of €0.02 cents. Rounding is inevitable for correct bookings and calculations. Within the invoicing module, it is assumed that the calculation of the VAT amount per line on an invoice must be correct.

During the preparation of total amounts, the VAT amount per line must be calculated, as it is possible to use a different VAT rate per line. It should also be possible to print the VAT per line on, for example, invoices.

This is the reason why the VAT amount in RetailVista is rounded to (maximum) 2 decimals per line during input. A VAT rate of 19% quickly results in small rounding differences.

Example

There are 5 invoice lines, each with a net amount of €0.50. The applied VAT rate is 19%. The VAT is calculated per line with 2 decimal precision. For each line, €0.10 VAT is calculated. The total VAT amount for the 5 lines is €0.50. If the VAT amount is manually calculated for the total net amount, the calculation is as follows: €2.50 * 19% = €0.475. This is rounded to €0.48. There is a difference of €0.02.

Legislation

Fiscal legislation does not prescribe whether VAT should be recalculated from total amounts or determined per line and then totaled. The choice of method is left to the software developer.

Based on the above explanation, NedFox has chosen to do this for each individual line.

Links

Legal case Albert Heijn regarding the used rounding system for rounding up/down per line. The outcome of the case was that VAT may not necessarily be rounded up/down, but should be rounded per line based on the usual rounding of €0.05 up/down.

https://btwjurisprudentie.nl/hvj-10-07-2008-koninklijke-ahold-c-48406/ 

http://curia.europa.eu/juris/liste.jsf?language=nl&num=C-484/06 

Tax authority/ministry directive following uncertainties CPP2007/308M. In short, 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.However, it is decided to leave this to software developers/companies in order to prevent administrative burden.