Updated VAT and Subtotal Calculations in Wafeq as of December 8, 2023

As of December 8, 2023, Wafeq has implemented new methods for calculating VAT and subtotals to align with recent regulations from local tax authorities.

New Calculation Method

The updated calculation method in Wafeq is as follows:

• Line Amount Excluding Tax: Calculated as Quantity x Price before tax x (1 - Discount %) rounded to two decimals.
• Taxable Amount Per Tax Group: Sum of Line Amounts Excluding Tax for each tax group, minus any document-level discount for that group.
• Tax Group Tax: Taxable amount for each group multiplied by its tax rate, rounded to two decimals.
• Subtotal: Sum of all Line Amounts Excluding Tax.
• Total Tax: Aggregate of each tax group's tax.
• Total Invoice Amount: Taxable Subtotal plus Total Tax.

Illustrative Example

Consider an invoice with the following details:



Calculation Steps:

1. Taxable Amount per 15% Tax Group => 10834.79 (since it's the only item in this group).
2. Taxable Amount per 0% Tax Group => 3018.27.
3. Taxable Subtotal => 10834.79 + 3018.27 = 13853.06.
4. Subtotal => Equal to the Taxable Subtotal 13853.06 as there are no document-level discounts.
5. VAT for 15% Tax Group => 10834.79 * 15% = 1625.2185, rounded to 1625.22.
6. VAT for 0% Tax Group => 3018.27 * 0% = 0.
7. VAT Total=> 1625.22 + 0 = 1625.22.
8. Total Invoice Amount => 13853.06 + 1625.22 = 15478.28 Taxable Subtotal + VAT Total

Handling Documents Created Before December 8, 2023

For documents created before this date, the old VAT calculation method will remain in effect. To apply the new rules to an older document, duplicate it. This process applies the new rules to the copy, allowing you to delete the original.

For more information on the previous VAT calculation method, please refer to [this article].