Increasingly, companies with a web presence, selling products to customers in multiple countries are required to collect GST/VAT/C-Tax (name your term) on behalf of the destination country. For the most part, the Tax module in D365 is flexible enough to supports this. However, one gap we have encountered working with a few of our clients, relates to the tax treatment of different products in different countries.

As an example, in Australia sunscreen is tax-free, whereas in New Zealand it is taxable. If we are selling sunscreen to customers in both countries from the same legal entity, this means we would need to create two products, with different default item tax groups. This becomes a headache when dealing with thousands of SKUs.

To me, the ideal solution seems to be have sales country overrides on released products. We could supplement the current default sales Item tax group field, with a separate table to store customer-country-specific defaults where required. When a sales order line is created, if an item tax group exists for the customer's country, use that, otherwise copy the usual default to the sales line. All standard logic would apply after that.
Category: Tax
Ideas Administrator

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PM, Eric Wang




Hi Emma,
Thank you for your suggestion. I understand what you're getting at. That will work for scenarios where an item is taxable in NZ and tax-free in Australia, because we have different tax rates and therefore the two countries have different tax codes for taxable items. Where it gets a bit messy, and difficult for clients to manage, is where there are more than two combinations of country/tax treatment/tax rates.

Category: Tax


Hi David!
Just a question- canĀ“t you solve this by having different sales tax groups on the customers including different VAT codes that will be triggered if you use the same item sales tax group?
For ex You create a specific item sales tax group called "sunscreen" including 1 taxable and 1 tax-free VAT code. On the two different customers the taxable VAT code is only included in the New Zealand customers sales tax group and the tax-free only in the Australia sales tax group. Could this work? You have also the possibility to override sales tax group on your delivery address if you set this up correctly.
Forgive me if I have misunderstood your issue in any way.
BR Emma

Category: Tax