Business Central shipping lines

Questions
1

Hello,

Currently working with a client that uses Business Central (ERP) and we’re having some issues with shipping orderlines.

Litium calculates Shipping VAT according to https://docs.litium.com/documentation/previous-versions/litium-7/litium-documentation/sales/pricing_rules_1/calculating_vat.

Meaning the VAT percentage for shipping/delivery can vary depending what products (VAT rates) you have in the cart. Like in the example below, the shipping VAT percentage is 15%.

However, when sending the orderlines to Business Central, they are expecting the two orderlines for shipping. One orderline for “SHIPPING12” and another for “SHIPPING25”.

Sample Data - All excluding vat

Subtotal: 2 069,00 SEK
Shipping: 693,36 SEK
Totals: 2 762,36 SEK

12% VAT: 183,72 SEK
25% VAT: 134,50 SEK
15% Shipping VAT: 106,64 SEK

Totals with VAT: 3 187,22 SEK

What we need help with

Basically, we need to determine how much of the shipping cost (693,36 SEK) should be on the “SHIPPING12” orderline and how much that should be on the “SHIPPING25” orderline.

I have a couple of ideas myself on how to calculate these values, but I have no clue if either of them are correct.

Has anyone worked with Business Central before and know how to calculate these values?

Litium version: 7.7.0

2

I don’t know the rules or laws around this but logically you do it in the same way as litium calculated the 15% VAT for the shipping. Look at the products total value for each VAT-bracket compared to order-total-product-value.

if you have a total value of product on 1000SEK, 750SEK is goods with 12% VAT and 250SEK in gods with 25% VAT
then 75% of the delivery VAT should be in 12% VAT and 25% in 25% VAT:

3

Alright, thanks!

You mention “75% of the delivery VAT”, do you perhaps mean just “75% of the delivery cost”?
We’re not sending VAT to Business Central at all, just the cost/sum of the shipping, excluding vat and vat rate.

So basically, if you have a total value of products at 1000 SEK, 750 SEK is goods with 12% VAT and 250 SEK in gods with 25% VAT and the shipping cost is 100 SEK.

Then 75 SEK (75%) will be on the 12% VAT shipping orderrow and 25 SEK (25) on the 25% shipping orderrow. For a total of 100 SEK shipping cost, excluding VAT, right?

4

If I remember correctly, you should do the calculation as below.

When calculating the prorata you need to use the product prices without vat. Take the product total amount for the specific tax-rate and divide with the total amount for all products, then you get the prorata-rate for each tax-rate. The prorata-rate will then be used to calculate how much of the shipping cost including vat that should go into each tax-rate and for each tax-rate you can then calculate the tax amount.

5

Thanks for the reply @patric.forsgard

Can I use the prorata-rate for calculating shipping cost excluding vat as well or will that be inaccurate?

6

The prorata will only find the rate for the different vat-rate that should be used, and I think it should work if you have the shipping cost in price excluding VAT and only adding the tax up on that to get the total price the buyer has to pay.

7

Alright, just confirmed with the customers BC partner, they’re expecting the shipping cost excluding vat, so we’re not adding any tax on our side.

8

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