Tax Calculation for Invoices with Discounts

Hi,

I need to setup Oracle Ebtax/Payables to satisfy the following requirement.

Invoice Net Amount: $500

VAT Rate: 20%

Discount: 5% ($25)

Tax: needs to be calculated as 500 - 25 = 475 * 20% = $95

How can I achieve this in Ebtax?

I assume that at invoice level there is not other way than calculating $100 (20% * 500), but when the discount is calculated at payment level, is it possible to adjust the VAT for -$5?

Any ideas are welcome.

Thanks,

Veronica