Tax Calculation service – enabling tax calculation parameters by tax jurisdiction

Important

Some of the functionality described in this release plan has not been released. Delivery timelines may change and projected functionality may not be released (see Microsoft policy). Learn more: What's new and planned

Enabled for Public preview General availability
Users by admins, makers, or analysts Apr 16, 2021 Jan 2022

Business value

The digitalization of tax and the steady stream of indirect tax regulations that global businesses encounter, such as VAT and GST, have further complicated existing processes by introducing new industry and compliance risks that challenge leaders in every global enterprise.

Tax Calculation allows you to improve compliance with associated local regulations. The new, configurable microservice (preview) enhances the tax determination and calculation capabilities in Dynamics 365 Finance and Dynamics 365 Supply Chain Management. Tax Calculation is fully integrated out of the box, and enables you to:

  • Automate and standardize tax determinations and calculations across countries or regions.
  • Use a configurable tax determination matrix and flexible calculation designer to configure and execute complex tax determination rules and calculations by using formulae and conditions.
  • Simplify compliance maintenance for local tax regulations.

Feature details

This feature is part of the Tax Calculation capabilities to support defining tax calculation parameters by tax jurisdiction in the Tax Calculation service.

Two matrices will be provided in the Tax Calculation service:

  • Tax jurisdiction applicability: This matrix determines the correct tax jurisdiction for the transaction.
  • Tax jurisdiction parameters: This matrix determines the correct tax calculation parameters under this jurisdiction.

The following tax calculation parameters are supported in the 2021 release wave 2 plan:

  • Deduct cash discount before sales tax calculation.
  • Reverse sales tax on cash discount.
  • Cash discount is calculated on amount including sales tax – Customer.
  • Cash discount is calculated on amount including sales tax – Vendor.

See also

Multiple VAT registration numbers (docs)