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In the current system design, the 'Override sales tax' checkbox is not available for Project Hour journals. As a result, when the Tax Calculation Service is enabled, all Project Hour journal lines are automatically subjected to tax calculation.

This behavior presents challenges in the following business scenarios during the creation of Project Invoice Proposals:

  • Scenario 1: The invoice proposal includes only Hour journal lines — no sales tax should be applied.
  • Scenario 2: The invoice proposal includes only Item journal lines — sales tax should be calculated for all lines.
  • Scenario 3: The invoice proposal includes both Item and Hour journal lines — sales tax should be calculated for all lines.

In Scenario 1, despite the expectation that no tax should be applied, the system continues to calculate sales tax on Hour journal lines when the Tax Calculation Service is active. This requires users to manually adjust the tax amounts, which is inefficient and time-consuming.

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Relevant document: https://learn.microsoft.com/en-us/dynamics365/finance/localizations/global/global-sales-tax-group-determination?context=%2Fdynamics365%2Fcontext%2Ffinance#override-sales-tax

Category: Globalization - Regulatory features