About Early Payment Discounts
The early payment discount initially is based on the voucher total, including all charges and VAT on the voucher. At the moment of payment, if the early payment discount is applied, the discount amount is split into two parts:
- Net discount amount, calculated by applying the discount percent that is defined in the payment terms to the voucher total, exclusive of the VAT.
- VAT adjustment, calculated by applying the discount percentage that is defined in the payment terms to the total VAT amount.
This discount affects these areas of the system:
- A/P Check Printing/Posting
- A/P Payment Distributions
- A/P Payments
- A/P Posted Transactions Detail
- A/P Posted Transactions Summary
- A/P Quick Payment Application
- A/P Vouchers and Adjustments
- A/R Payment Distributions
- A/R Payments
- A/R Posted Transactions Detail
- A/R Posted Transactions Summary
- A/R Quick Payment Application
- EU VAT Report
- Generate A/P Transactions
- Generate Landed Cost Vouchers
- Purchase Order Receiving
- VAT Report
Example: A/P Voucher Distributions
The Discount Amount is calculated against the sum of the Purchase Amount and the VAT Amount, as shown in this table:
| Concept | Tax Basis | VAT Percent |
|---|---|---|
| Purchase Amount | 400.00 | |
| Tax Basis | 400.00 | |
| Plus VAT | 76.00 | 19% |
| Voucher Total | 476.00 | |
| Minus Discount | 14.28 | 3% |
| Net Voucher Amount | 461.72 |
Tax Date for Early Payment Discounts
For Accounts Receivable and Accounts Payable payments made before the discount date and where the tax discount has been applied, the EU VAT Report shows the payment date as the Tax Date. If these dates fall outside the specified Tax Period Start and Tax Period End report options, these rows are not included in the report.
For multi-currency transactions that include early payment, the exchange rate used for VAT is based on the invoice date of the transaction.