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Applies to Product – Dynamics 365 Finance


What’s happening?
The customer is experiencing inconsistencies in VAT amounts when converting invoices from one currency to another, specifically from USD to PYG. The issue arises during the currency conversion process due to the number of decimal places utilized in the calculations.


Reason:
The underlying cause of this is that the system is configured to use a maximum of 2 decimal places for USD and 1 decimal place for PYG, which does not meet the customer's requirement of using 5 decimal places for accurate VAT calculations.


Resolution:

  1. The customer should enable the "Advanced Tax Calculation" feature in the Tax Calculation Service to achieve the desired decimal precision.
  2. Ensure that the tax setup is correctly configured in the Tax Calculation Service, as the default tax functionality may not support the required precision.
  3. Review the current settings on the Tax Calculation Service and adjust any advanced tax settings that might affect the calculation or distribution of VAT amounts.
  4. Conduct tests in the UAT environment to verify that the tax calculations are correct in the transaction currency before converting to the accounting currency.
  5. If discrepancies persist, the customer may need to involve their development team to explore further adjustments or configurations needed to align the accounting records with the original tax calculations.