Core is flexible regarding applying discounts to bill amounts before and after taxes. The discount reduces the final invoice amount after taxes have been added. It does not reduce the tax amount of either services or expenses. Proper security permission is required to apply a discount.
By default, Core applies a discount after applying the taxes. However, if you want to apply a discount to the bill amount before taxes, go to the Global Settings > Billing screen and select the 'Apply discount to pre-tax amount' option. When you re-open the Invoices screen, discount will be applied before the taxes.