Actual result:

The issue is there are unnecessary entries in tax submissions for zero invoices in a project management accounting. As per the customer the process generates in and out entries on tax submissions for zero invoices, which the business finds unnecessary since the tax document with the tax amount is already sent to the customer. This results in additional entries on the tax submission document each time revenue recognition generates a zero invoice, which the customer wants to avoid.

As customer identified when the marginal base of the applicable VAT code is set to 'Net amount per line'. the issue is happened.

However when they changed this parameter to ‘Net Amount of invoice balance’ for testing, and it produced the expected VAT results when a retainer (on-account) is offset against other transactions.

Expected result:

Those two entries have made it to the Tax Report, and this is what customer does not want, there is no need to show up on a tax transaction or a tax submission.

Because the VAT you need to support the Tax submission to tax authority is already happened. Customer does not want to show up these ones on the tax document.