Prompt for Tax Discount

Select this check box to prompt for a tax discount. Prompting for a tax discount lets you reduce the tax amount, using the customer's discount. This situation occurs mainly in the United Kingdom: when customers continually pays bills on time and receive the early payment discount, the vendor can apply to the taxing authority to enable the customer to pay taxes only on the final amount.

When this Prompt for Tax Discount option is selected, a new field called Tax Disc % appears on the Billing Terms form.

If the customer's order or A/R invoice specifies a billing term that includes a tax discount, the tax amount is multiplied by (100 - Tax Disc %) / 100 to reduce it when calculated for invoicing. Whether or not the customer pays early and takes the discount on the open item, the tax amount is not further adjusted. It is fixed when the invoice is posted.