fix: prevent double rounding in inclusive tax calculations (backport #52512) (#55570)

Co-authored-by: Luis Mendoza <mendozal@gmail.com>
Co-authored-by: Diptanil Saha <diptanil@frappe.io>
fix: prevent double rounding in inclusive tax calculations (#52512)

erpnext/accounts/doctype/sales_invoice/test_sales_invoice.py

@@ -383,6 +383,262 @@ class TestSalesInvoice(ERPNextTestSuite):
 		self.assertEqual(si.net_total, 3859.65)
 		self.assertEqual(si.grand_total, 4900.00)
 
+	@ERPNextTestSuite.change_settings("System Settings", {"number_format": "#,###", "currency_precision": 0})
+	def test_inclusive_tax_zero_decimal_currency(self):
+		"""Tax-included prices in zero-decimal currencies (e.g. JPY) must not produce
+		net + tax != gross due to double rounding of the net amount."""
+		si = create_sales_invoice(qty=1, rate=50000, do_not_save=True)
+		si.append(
+			"taxes",
+			{
+				"charge_type": "On Net Total",
+				"account_head": "_Test Account Service Tax - _TC",
+				"cost_center": "_Test Cost Center - _TC",
+				"description": "Tax 10%",
+				"rate": 10,
+				"included_in_print_rate": 1,
+			},
+		)
+		si.insert()
+
+		# With currency_precision=0 (like JPY, KRW):
+		# 50,000 / 1.10 = 45,454.545... → net rounds to 45,455
+		# Tax from unrounded net: 0.10 * 45,454.545 = 4,545.4545 → rounds to 4,545
+		# The fix ensures net + tax = gross without double rounding error
+		self.assertEqual(si.items[0].net_amount, 45455)
+		self.assertEqual(si.taxes[0].tax_amount, 4545)
+		self.assertEqual(si.grand_total, 50000)
+
+	def test_inclusive_tax_decimal_value_currency(self):
+		"""Tax-included prices with decimal currency values must preserve gross total."""
+		si = create_sales_invoice(qty=1, rate=10000.04, do_not_save=True)
+		si.append(
+			"taxes",
+			{
+				"charge_type": "On Net Total",
+				"account_head": "_Test Account Service Tax - _TC",
+				"cost_center": "_Test Cost Center - _TC",
+				"description": "Tax 10%",
+				"rate": 10,
+				"included_in_print_rate": 1,
+			},
+		)
+		si.insert()
+
+		# 10,000.04 / 1.10 = 9,090.94545... → net rounds to 9,090.95
+		# Tax from unrounded net: 0.10 * 9,090.94545... = 909.0945... → rounds to 909.09
+		# If tax were calculated from rounded net instead, it would become 909.10 and grand total 10,000.05.
+		self.assertEqual(si.items[0].net_amount, 9090.95)
+		self.assertEqual(si.taxes[0].tax_amount, 909.09)
+		self.assertEqual(si.grand_total, 10000.04)
+
+	@ERPNextTestSuite.change_settings("System Settings", {"number_format": "#,###", "currency_precision": 0})
+	def test_inclusive_tax_zero_decimal_currency_multiple_items(self):
+		"""Multiple items with tax-included prices in zero-decimal currency."""
+		si = create_sales_invoice(qty=1, rate=50000, do_not_save=True)
+		create_item("_Test Inclusive Tax Item 2")
+		si.append(
+			"items",
+			{
+				"item_code": "_Test Inclusive Tax Item 2",
+				"warehouse": "_Test Warehouse - _TC",
+				"qty": 1,
+				"rate": 30000,
+				"income_account": "Sales - _TC",
+				"expense_account": "Cost of Goods Sold - _TC",
+				"cost_center": "_Test Cost Center - _TC",
+			},
+		)
+		si.append(
+			"taxes",
+			{
+				"charge_type": "On Net Total",
+				"account_head": "_Test Account Service Tax - _TC",
+				"cost_center": "_Test Cost Center - _TC",
+				"description": "Tax 10%",
+				"rate": 10,
+				"included_in_print_rate": 1,
+			},
+		)
+		si.insert()
+
+		# With currency_precision=0:
+		# Item 1: 50,000 / 1.10 = 45,454.545 → net 45,455, tax 4,545
+		# Item 2: 30,000 / 1.10 = 27,272.727 → net 27,273, tax 2,727
+		# Per-item: net + tax = gross holds (45455+4545=50000, 27273+2727=30000)
+		# Accumulated tax rounds separately: flt(7272.72, 0) = 7273
+		# adjust_grand_total_for_inclusive_tax patches grand_total back to 80000
+		self.assertEqual(si.items[0].net_amount, 45455)
+		self.assertEqual(si.items[1].net_amount, 27273)
+		self.assertEqual(si.net_total, 72728)
+		self.assertEqual(si.taxes[0].tax_amount, 7273)
+		self.assertEqual(si.grand_total, 80000)
+
+	@ERPNextTestSuite.change_settings("System Settings", {"number_format": "#,###", "currency_precision": 0})
+	def test_inclusive_tax_zero_decimal_currency_many_items(self):
+		"""Test with 10 items (mixed 10% and 5% tax) to verify tolerance of 1 is sufficient."""
+		si = create_sales_invoice(qty=1, rate=50000, do_not_save=True)
+
+		# Add 9 more items - mix of amounts and tax rates
+		# Using similar amounts to maximize same-direction rounding
+		item_configs = [
+			("_Test Inclusive Tax Item 2", 50100, None),  # 10% (default)
+			("_Test Inclusive Tax Item 3", 50200, '{"_Test Account Service Tax - _TC": 5}'),  # 5%
+			("_Test Inclusive Tax Item 4", 50300, None),  # 10%
+			("_Test Inclusive Tax Item 5", 50400, '{"_Test Account Service Tax - _TC": 5}'),  # 5%
+			("_Test Inclusive Tax Item 6", 50500, None),  # 10%
+			("_Test Inclusive Tax Item 7", 50600, '{"_Test Account Service Tax - _TC": 5}'),  # 5%
+			("_Test Inclusive Tax Item 8", 50700, None),  # 10%
+			("_Test Inclusive Tax Item 9", 50800, None),  # 10%
+			("_Test Inclusive Tax Item 10", 50900, '{"_Test Account Service Tax - _TC": 5}'),  # 5%
+		]
+
+		for item_code, rate, item_tax_rate in item_configs:
+			create_item(item_code)
+			item_dict = {
+				"item_code": item_code,
+				"warehouse": "_Test Warehouse - _TC",
+				"qty": 1,
+				"rate": rate,
+				"income_account": "Sales - _TC",
+				"expense_account": "Cost of Goods Sold - _TC",
+				"cost_center": "_Test Cost Center - _TC",
+			}
+			if item_tax_rate:
+				item_dict["item_tax_rate"] = item_tax_rate
+			si.append("items", item_dict)
+
+		si.append(
+			"taxes",
+			{
+				"charge_type": "On Net Total",
+				"account_head": "_Test Account Service Tax - _TC",
+				"cost_center": "_Test Cost Center - _TC",
+				"description": "Tax 10%",
+				"rate": 10,
+				"included_in_print_rate": 1,
+			},
+		)
+		si.insert()
+
+		# Verify each item: net + tax = gross (within rounding tolerance)
+		total_gross = 0
+		for item in si.items:
+			total_gross += item.amount
+
+		# Grand total should match sum of gross amounts
+		# This tests that the tolerance of 1 handles mixed tax rates and similar amounts
+		self.assertEqual(si.grand_total, total_gross)
+
+	def test_inclusive_tax_with_decimal_value_on_previous_row_amount(self):
+		"""Inclusive tax with decimal value and On Previous Row Amount must not double-round net amount."""
+		si = create_sales_invoice(qty=1, rate=50000.55, do_not_save=True)
+		si.append(
+			"taxes",
+			{
+				"charge_type": "On Net Total",
+				"account_head": "_Test Account Service Tax - _TC",
+				"cost_center": "_Test Cost Center - _TC",
+				"description": "Tax 10%",
+				"rate": 10,
+				"included_in_print_rate": 1,
+			},
+		)
+		si.append(
+			"taxes",
+			{
+				"charge_type": "On Previous Row Amount",
+				"account_head": "_Test Account Education Cess - _TC",
+				"cost_center": "_Test Cost Center - _TC",
+				"description": "Cess 5% on Tax 10%",
+				"rate": 5,
+				"row_id": 1,
+				"included_in_print_rate": 1,
+			},
+		)
+		si.insert()
+
+		# Tax fractions: 10% + (5% of 10%) = 10.5%
+		# 50,000.55 / 1.105 = 45,249.3665... → net rounds to 45,249.37
+		# Taxes are calculated from the unrounded net to keep the inclusive gross stable.
+		self.assertEqual(si.items[0].net_amount, 45249.37)
+		self.assertEqual(si.taxes[0].tax_amount, 4524.94)
+		self.assertEqual(si.taxes[1].tax_amount, 226.25)
+		self.assertEqual(si.grand_total, 50000.55)
+
+	def test_inclusive_tax_with_decimal_value_on_previous_row_amount_non_inclusive(self):
+		"""Non-inclusive previous-row tax should be added after inclusive tax extraction."""
+		si = create_sales_invoice(qty=1, rate=10000.04, do_not_save=True)
+		si.append(
+			"taxes",
+			{
+				"charge_type": "On Net Total",
+				"account_head": "_Test Account Service Tax - _TC",
+				"cost_center": "_Test Cost Center - _TC",
+				"description": "Tax 10%",
+				"rate": 10,
+				"included_in_print_rate": 1,
+			},
+		)
+		si.append(
+			"taxes",
+			{
+				"charge_type": "On Previous Row Amount",
+				"account_head": "_Test Account Education Cess - _TC",
+				"cost_center": "_Test Cost Center - _TC",
+				"description": "Cess 5% on Tax 10%",
+				"rate": 5,
+				"row_id": 1,
+				"included_in_print_rate": 0,
+			},
+		)
+		si.insert()
+
+		# Only the first tax is inclusive:
+		# 10,000.04 / 1.10 = 9,090.94545... → net rounds to 9,090.95
+		# Inclusive tax = 909.09, restoring the original gross of 10,000.04
+		# The non-inclusive previous-row tax is added afterward: 5% of 909.09 = 45.45
+		self.assertEqual(si.items[0].net_amount, 9090.95)
+		self.assertEqual(si.taxes[0].tax_amount, 909.09)
+		self.assertEqual(si.taxes[1].tax_amount, 45.45)
+		self.assertEqual(si.grand_total, 10045.49)
+
+	def test_inclusive_tax_with_decimal_value_on_previous_row_total(self):
+		"""Inclusive tax with decimal value and On Previous Row Total must not double-round net amount."""
+		si = create_sales_invoice(qty=1, rate=50000.55, do_not_save=True)
+		si.append(
+			"taxes",
+			{
+				"charge_type": "On Net Total",
+				"account_head": "_Test Account Service Tax - _TC",
+				"cost_center": "_Test Cost Center - _TC",
+				"description": "Tax 10%",
+				"rate": 10,
+				"included_in_print_rate": 1,
+			},
+		)
+		si.append(
+			"taxes",
+			{
+				"charge_type": "On Previous Row Total",
+				"account_head": "_Test Account Education Cess - _TC",
+				"cost_center": "_Test Cost Center - _TC",
+				"description": "Cess 5% on Previous Total",
+				"rate": 5,
+				"row_id": 1,
+				"included_in_print_rate": 1,
+			},
+		)
+		si.insert()
+
+		# Tax fractions: 10% + (5% of 110%) = 15.5%
+		# 50,000.55 / 1.155 = 43,290.5195... → net rounds to 43,290.52
+		# Taxes are calculated from the unrounded net/previous total to keep the inclusive gross stable.
+		self.assertEqual(si.items[0].net_amount, 43290.52)
+		self.assertEqual(si.taxes[0].tax_amount, 4329.05)
+		self.assertEqual(si.taxes[1].tax_amount, 2380.98)
+		self.assertEqual(si.grand_total, 50000.55)
+
 	def test_sales_invoice_discount_amount(self):
 		si = frappe.copy_doc(self.globalTestRecords["Sales Invoice"][3])
 		si.discount_amount = 104.94

erpnext/controllers/taxes_and_totals.py

@@ -304,6 +304,7 @@ class calculate_taxes_and_totals:
 			return
 
 		for item in self.doc.items:
+			item._unrounded_net_amount = None
 			item_tax_map = self._load_item_tax_rate(item.item_tax_rate)
 			cumulated_tax_fraction = 0
 			total_inclusive_tax_amount_per_qty = 0
@@ -331,7 +332,8 @@ class calculate_taxes_and_totals:
 			):
 				amount = flt(item.amount) - total_inclusive_tax_amount_per_qty
 
-				item.net_amount = flt(amount / (1 + cumulated_tax_fraction), item.precision("net_amount"))
+				item._unrounded_net_amount = amount / (1 + cumulated_tax_fraction)
+				item.net_amount = flt(item._unrounded_net_amount, item.precision("net_amount"))
 				item.net_rate = flt(item.net_amount / item.qty, item.precision("net_rate"))
 				item.discount_percentage = flt(
 					item.discount_percentage, item.precision("discount_percentage")
@@ -541,7 +543,9 @@ class calculate_taxes_and_totals:
 			actual_breakup = tax._total_tax_breakup
 			diff = flt(expected_amount - actual_breakup, 5)
 
-			if abs(diff) <= 0.5:
+			# TODO: fix rounding difference issues
+			# Allow up to 1 for zero-precision currencies (e.g. JPY, KRW)
+			if abs(diff) <= (1 if tax.precision("tax_amount") == 0 else 0.5):
 				detail_row = self.doc._item_wise_tax_details[last_idx]
 				detail_row["amount"] = flt(detail_row["amount"] + diff, 5)
 
@@ -600,7 +604,16 @@ class calculate_taxes_and_totals:
 		elif tax.charge_type == "On Net Total":
 			if tax.account_head in item_tax_map:
 				current_net_amount = item.net_amount
-			current_tax_amount = (tax_rate / 100.0) * item.net_amount
+
+			# Use unrounded net for inclusive taxes to avoid double rounding
+			if (
+				cint(tax.included_in_print_rate)
+				and not self.discount_amount_applied
+				and item._unrounded_net_amount is not None
+			):
+				current_tax_amount = (tax_rate / 100.0) * item._unrounded_net_amount
+			else:
+				current_tax_amount = (tax_rate / 100.0) * item.net_amount
 		elif tax.charge_type == "On Previous Row Amount":
 			current_net_amount = self.doc.get("taxes")[cint(tax.row_id) - 1].tax_amount_for_current_item
 			current_tax_amount = (tax_rate / 100.0) * current_net_amount

erpnext/public/js/controllers/taxes_and_totals.js

@@ -258,6 +258,7 @@ erpnext.taxes_and_totals = class TaxesAndTotals extends erpnext.payments {
 		if (has_inclusive_tax == false) return;
 
 		$.each(this.frm.doc.items || [], function (n, item) {
+			item._unrounded_net_amount = null;
 			var item_tax_map = me._load_item_tax_rate(item.item_tax_rate);
 			var cumulated_tax_fraction = 0.0;
 			var total_inclusive_tax_amount_per_qty = 0;
@@ -284,7 +285,8 @@ erpnext.taxes_and_totals = class TaxesAndTotals extends erpnext.payments {
 				(total_inclusive_tax_amount_per_qty || cumulated_tax_fraction)
 			) {
 				var amount = flt(item.amount) - total_inclusive_tax_amount_per_qty;
-				item.net_amount = flt(amount / (1 + cumulated_tax_fraction), precision("net_amount", item));
+				item._unrounded_net_amount = amount / (1 + cumulated_tax_fraction);
+				item.net_amount = flt(item._unrounded_net_amount, precision("net_amount", item));
 				item.net_rate = item.qty ? flt(item.net_amount / item.qty, precision("net_rate", item)) : 0;
 
 				me.set_in_company_currency(item, ["net_rate", "net_amount"]);
@@ -567,7 +569,14 @@ erpnext.taxes_and_totals = class TaxesAndTotals extends erpnext.payments {
 			if (tax.account_head in item_tax_map) {
 				current_net_amount = item.net_amount;
 			}
-			current_tax_amount = (tax_rate / 100.0) * item.net_amount;
+			// Use unrounded net for inclusive taxes to avoid double rounding
+			var net_for_tax =
+				cint(tax.included_in_print_rate) &&
+				!this.discount_amount_applied &&
+				item._unrounded_net_amount !== null
+					? item._unrounded_net_amount
+					: item.net_amount;
+			current_tax_amount = (tax_rate / 100.0) * net_for_tax;
 		} else if (tax.charge_type == "On Previous Row Amount") {
 			current_net_amount = this.frm.doc["taxes"][cint(tax.row_id) - 1].tax_amount_for_current_item;
 			current_tax_amount =