diff --git a/src/Apps/W1/ExpenseAgent/test/src/ExpensePostingVATTest.Codeunit.al b/src/Apps/W1/ExpenseAgent/test/src/ExpensePostingVATTest.Codeunit.al
index e481493261c..4f28fd7ca42 100644
--- a/src/Apps/W1/ExpenseAgent/test/src/ExpensePostingVATTest.Codeunit.al
+++ b/src/Apps/W1/ExpenseAgent/test/src/ExpensePostingVATTest.Codeunit.al
@@ -427,6 +427,7 @@ codeunit 148330 "Expense Posting VAT Test"
         VATSetup.Modify(true);
 
         LibraryERMCountryData.UpdateJournalTemplMandatory(false);
+        LibraryERMCountryData.UpdateLocalData();
         LibraryExpense.SetupNumberSeriesInExpenseMgmt();
         LibraryExpense.InitializeExpenseSourceCode();
         LibraryExpense.UpdateEnableApprovalWorkflowInAgentSetup(false);
diff --git a/src/DisabledTests/Expense_Agent_Tests/Expense_Agent_Tests.DisabledTest.json b/src/DisabledTests/Expense_Agent_Tests/Expense_Agent_Tests.DisabledTest.json
index f1181ff4635..380b2231c07 100644
--- a/src/DisabledTests/Expense_Agent_Tests/Expense_Agent_Tests.DisabledTest.json
+++ b/src/DisabledTests/Expense_Agent_Tests/Expense_Agent_Tests.DisabledTest.json
@@ -183,30 +183,5 @@
     "codeunitId": 148319,
     "codeunitName": "Cancel Posted Exp. Report Test",
     "method": "CancelMultiLineReportGeneratesNewTransactionNoForReversedLines"
-  },
-  {
-    "codeunitId": 148330,
-    "codeunitName": "Expense Posting VAT Test",
-    "method": "HotelMultiSubcatDiffVAT"
-  },
-  {
-    "codeunitId": 148330,
-    "codeunitName": "Expense Posting VAT Test",
-    "method": "VATEntriesPerHotelSubcat"
-  },
-  {
-    "codeunitId": 148330,
-    "codeunitName": "Expense Posting VAT Test",
-    "method": "GLEntriesCorrectVATAmounts"
-  },
-  {
-    "codeunitId": 148330,
-    "codeunitName": "Expense Posting VAT Test",
-    "method": "HotelRefundableSubcat"
-  },
-  {
-    "codeunitId": 148330,
-    "codeunitName": "Expense Posting VAT Test",
-    "method": "VATSpecApprovedAndRejectedLines"
   }
 ]
diff --git a/src/Layers/IT/BaseApp/Finance/GeneralLedger/Posting/GenJnlPostLine.Codeunit.al b/src/Layers/IT/BaseApp/Finance/GeneralLedger/Posting/GenJnlPostLine.Codeunit.al
index f06c843ed68..3e852e22af1 100644
--- a/src/Layers/IT/BaseApp/Finance/GeneralLedger/Posting/GenJnlPostLine.Codeunit.al
+++ b/src/Layers/IT/BaseApp/Finance/GeneralLedger/Posting/GenJnlPostLine.Codeunit.al
@@ -879,6 +879,13 @@ codeunit 12 "Gen. Jnl.-Post Line"
         else
             VATEntry."VAT Registration No." := GenJnlLine."VAT Registration No.";
         VATEntry."Country/Region Code" := GenJnlLine."Country/Region Code";
+        // When the journal line is created programmatically without going through
+        // OnValidate of "VAT Prod. Posting Group" (e.g. expense report posting),
+        // "Deductible %" stays at its default 0.  In that case fall back to the
+        // VAT Posting Setup value so that ChangeVATAmounts uses the correct
+        // deductible percentage instead of treating all VAT as non-deductible.
+        if GenJnlLine."Deductible %" = 0 then
+            GenJnlLine."Deductible %" := VATPostingSetup."Deductible %";
         VATEntry."Deductible %" := GenJnlLine."Deductible %";
         VATEntry."VAT %" := VATPostingSetup."VAT %";
         VATEntry."Operation Occurred Date" := GenJnlLine."Operation Occurred Date";