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Applies to Product -Dynamics 365 Lifecycle Services


What’s happening?
The customer accidentally ran the "settle and post sales tax" process and needs to reverse the resulting entries.


Reason:
The sales tax was posted by mistake during the settlement process.


Resolution:
To reverse the transactions made by the "settle and post sales tax" in Microsoft Dynamics 365, follow these steps:

  1. Take a Screenshot: Capture the incorrect settlement voucher for reference.
  2. Calculate Balances:
  3. Go to the Trial Balance.
  4. Calculate balances for the tax period by clicking ‘Calculate Balances’.
  5. Filter by the account shown in the incorrect settlement voucher.
  6. Find the Incorrect Voucher:
  7. Click on All Transactions.
  8. Filter by date or voucher to locate the incorrect tax settlement voucher.
  9. Reverse the Transaction:
  10. Select the incorrect settlement voucher.
  11. Click on the transaction.
  12. Fill in the Reversal Posting Date and click OK. This step reverses the incorrect settlement voucher and should not impact the trial balance anymore.
  13. If the voucher cannot be reversed in this account, use a different account and repeat steps 3 and 4.
  14. Update TaxTrans:
  15. Update the TaxTrans of the reverse voucher using the following SQL script: sql UPDATE TaxTrans SET ORIGINTAXTRANSRECID = {ALPHANUMERICPII} WHERE voucher = 'voucher of tax payment reverse voucher' AND transdate = 'the transaction date of tax payment reverse voucher' AND DATAAREAID = 'data area {ALPHANUMERICPII}'
  16. Create a New Tax Period:
  17. Set up new period intervals.
  18. Update the old TaxTrans’s tax period to the new tax period using the following script: sql UPDATE TaxTrans SET taxperiod = 'Test' WHERE taxperiod = {ALPHANUMERICPII} AND dataareaid = {ALPHANUMERICPII} AND transdate = {ALPHANUMERICPII} AND taxrepcounter = {ALPHANUMERICPII} AND source != {ALPHANUMERICPII}
  19. Post Sales Tax Again:
  20. Go to Tax Declarations > Sales Tax and post sales tax and settle for the new tax period.
If the above steps do not work and the voucher cannot be reversed, try the following: - Go to the tax authority vendor account. - Go to Vendor Transactions and attempt to reverse the settled voucher. - If some vendors cannot be reversed, try other ones. - If the issue persists due to year-end closing, reverse the year-end closing first and then reverse the transaction.
For more details, refer to the documentation on reversing a sales tax payment and the reverse charge mechanism for VAT/GST scheme in Dynamics 365.