In countries like UK VAT system works. So in VAT system, VAT taxes are included in product's price. So OFBiz have support of VAT tax where you can include VAT in product's price itself. Here is the example data we create to enable VAT calculations:
When invoices are created, tax amount included in product's price is not separated in new invoice line item. And when general ledger postings are done, then tax amount is not posted in Liability account. So due to this organizations have no way to figure out how much tax is to be paid to tax authority.
Ideally, product's actual price (without VAT) should be recorded in revenue account and tax should be recorded in liability account.
For doing this, when invoice is created, VAT amount should be separated and created as new line item.
Recently we have worked for one of our client where we have fixed this issue and enabled invoicing in OFBiz to record vat tax amount as separate line items. Scott Gray has actively worked with us to finalize the solution design and completing the implementation. Ankush Upadhyay is the developer who worked on solution design. Ankush Upadhyay please provide the patch for this issue.