Calculate Tax on Tax Field, Tax Jurisdiction Table
Specifies whether to calculate the sales tax amount with the tax on tax principle. This means that when calculating sales tax for the current jurisdiction, the sales tax amounts for previous jurisdictions are part of the basis.
The order in which tax is calculated for the individual jurisdictions is determined by the setting in the Calculation Order field on the tax area lines.
For example, if sales tax must be calculated for three jurisdictions at 3%, 5% and 2% respectively and the tax on tax principle is used for the first two jurisdictions, the accumulated sales tax percentage will be:
| Tax on tax principle at 3%, 5% and 2% | Accumulated tax |
|---|---|
1 * 0.03 |
= 0.03000 |
+ (1 + 0.03) * 0.05 |
= 0.05150 |
+ (1 + 0.03 + 0.0515) * 0.02 |
= 0.02163 |
Total |
= 0.10313 = 10.313 % |
Tip
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Parent Tables
| Table | Location |
|---|---|
| Tax Jurisdiction Table | General Ledger |
| Tax Jurisdiction Table | General Ledger |